Luziania-Niquelandia Transmissora

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In December 2011, Consorcio Luziania-Niquelandia, a partnership of the State Grid Brazil Holding S.A. (51%), a subsidiary of State Corporation of China, and the Brazilian state-owned company Furnas (49%), was awarded in a competitive bidding process the contract to build and operate two substations located in the state of Goias. The SE Luziania was set to have a planned capacity of 500/138 kV and SE Niquelandia, 230/69 kV. Besides Consorcio Luziania-Niquelandia, only another company took part in the contest, Alupar Investimentos S/A. The bidding criteria set by the regulatory agency ANEEL was the lowest required annual revenue. Consorcio Luziania-Niquelandia presented the lowest offer, a total value of US$ 4.6 million (BRL 7.45 million), 5.2% below the ceiling set by the regulatory agency. The contracts were signed in May 2012 for SE Luziania and in January 2013, for SE Niquelandia. The sponsors created the company Luziania-Niquelandia Transmissora S.A. to lead the project during the 30-year contract period. The sponsor committed to invest US$ 25.2 million (BRL 59,3 million) in the two substations. SE Luziania commenced operations in June 2014 and, as of December 2014, the construction works of SE Niquelandia were in advance stage. The company was granted the right to take part in the government program called Regime Especial de Incentivos para o Desenvolvimento da Infra-Estrutura (Reidi). Companies selected to take part in this program were given tax cuts in the acquisition of capital equipment and construction material acquired both in the domestic and international markets (this incentive represented a cost reduction of about 9.25%). In addition, the company was allowed to use accelated depreciation methods of accounting for construction expenditures.