Peru Rail

completed

Under the 30-year concession contract the Peruvian state railway ENAFER transferred fixed assets and rolling stock of the Southern line and Southeastern line to Ferrocarril Transandino S.A. According to the concession agreement, the shareholders of the Concessionaire are allowed to own one railway operating company. Orient-Express and Peruval formed PeruRail S.A. and took over operations of the network on September 21, 1999. In addition, the shareholders formed Meviasur S.A.C., a company responsible for infrastructure maintenance.The project comprises the project company’s investments for upgrading and rehabilitation of the railway network, the rehabilitation of rolling stock, the purchase of equipment and radio system and other investments from 2001 to 2004. In addition, the project includes the refinancing of investments in 2000. The project company is expected to improve and maintain the railroad according to Class II American railway standards as specified in the bidding documents and the concession contract. Major parts of track and superstructure will be upgraded, locomotives will be maintained and replaced, and the telecommunication system will be replaced. The railway sector plays an important economic role in Peru by transporting large amounts of minerals, petroleum derivatives, and other bulk commodities that constitute a substantial part of total exports. This role is even enhanced by helping in the strategic regional development of the ports and in the attraction larger tourism inflows to the country. IFC has been asked to help financing the project by providing long-term financing on appropriate terms and maturities which are otherwise not available on a project financing basis in Peru.