Peruvian Railway Network - Southern and Southeastern Lines

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The Peruvian government awarded the concessions for the Central, Southern and Southeastern rail lines to the consortium Ferrocarriles del Peru in July 1999. Ferrocarriles winning bid was the offer to the government of 33.4% of its annual gross revenue. Ferrocarriles del Peru was a joint-venture of the UK Commonwealth Development Corporation, the Railroad Development Corp. (US), Peruvial, Buenaventura, Inversiones Andino, Juan Olaechea y Cia, Sea Containers (UK) and Mitsui Co. (Japan). Ferrocarriles bid as an open consortium. Ferrocarril Transandino S.A. has taken over both the Southern Railway (Matarani-Juliaca-Cuzco) and the Southeastern Railway (Cuzco-Machu Pichu). The concessionaire is owned by PeruRail S.A. a subsidiary of Sea Containers (50%) and Peruval (50%). Sea Containers started operating these two sections, which run both freight and passenger traffic, in September 1999. The consortium expects to invest US$ 10 million over the next two years (total estimated investment: US$ 40 million). The 30-year contract is extendable for additional 30 years. Peru Rail expected to raise its cargo shipments (mainly soybean and wheat) from 560,000 tons in 2000 to 800,000 tons in 2001. As for the passenger transportation segment, a total of 400,000 users were transported in 2000. http://www1.ifc.org/ar2002/pdf/FY2002Commitments.pdf Check for board approval of Peru Rail II loan on the IFC website In the 2006-11 period, PeruRail expects to implement a capital expenditure program of $49 million of which 35% will be in rolling stock investments. IFC’s proposed investment consists of a long-term revolving credit facility (A loan) of up to $8 million for IFC's own account.