Planalto Sul Highway

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In February 2008, the Brazilian federal government signed a 25-year concession contract with Obrascon Huarte Lain (OHL) [Spain] to operate and rehabilitate the Litoral Sul Highway. The Litoral Sul Highway consisted of 413 km of federal highway BR-116 between Curitiba city and the border of Santa Catarina/Rio Grande do Sul. OHL formed Autopista Litoral Sul as the project company. OHL owned 60% of the equity through its subsidiary OHL Brasil. The remaining 40% was owned by private individuals. The project was awarded to OHL in October 2007 along with four other concession contracts in an international competitive tender in which the bidding criteria was the lowest tariff. OHL was awarded the bid after submitting the low bid of: 2.540 Brazilian reals. A total of 28 bidders competed in the auction, but the specific number of bidders for Planalto Sul was not available. The total project cost was estimated at US $677.9 million over the life of the project. After taking possession of all five highways in February 2008, OHL began building toll plazas in July 2008 to recover its cost. By December 2008, more than half of the toll plazas had been built. In July 2008, OHL Brasil closed its R$670 (US$420.3m) financing for its five toll road concessions won in October 2007, with Santander as the lead bank, followed by Banco do Brasil and Bradesco. The cost was to be CDI, or 12.6%, plus1.037%, with an 18-month term and a bullet. It was still seeking long term financing and had negotiated requested funding from BNDES, Brazil’s development bank, which agreed to fund approximately 70% of the project cost. The remaining 30% was to be funded from OHL’s equity. As of December 2008, long term financing had not been arranged. As of Sep. 2009, the OHL group was experiencing difficulties and investments were delayed. The group alleged that traffic had been below the estimation and environmental hurdles had delayed the instalation of the toll booths. As a result, the group requested that the toll rates should be increased. In addition, due to the 2008 financial crisis, the concessionares in the toll road sector in Brazil have faced higher costs on external financing. In March 2011, the state-owned bank BNDES granted a US$ 203 million (BRL 331.3 million) loan to the company to finance the infrastructure works. In February 2015, BNDES granted additional US$ 52.6 million (BRL 175.4 million) funding to the project.