Red Vial Number 6

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In September 2005, Peruvian Ministry of Transport and Communications granted a 30 year concession contract to Concesionaria Vial del Peru to expand, rehabilitate, and operate Red Vial Number 6 project. The project consisted of rehabilitating and maintaining a 72 km stretch of Panamerican South highway between Pucusana bridge and Cerro Azul, and the construction of a 149km toll road between Cerro Azul and Ica city (roughly 300 km south of Lima). The concession contract was attractive as it was one of the country's busiest highways, and economic development and growth was expected in the highway impact zone (Chincha, Cañete and Pisco). Concesionaria Vial del Peru, previous known as Binacional Andino consortium, was formed by Ecuadorian company Hidalgo & Hidalgo and local firm Cono Norte-Construccion y Administracion SA. There was not public information on stake of consortium members. The project cost was estimated in US$191 millions. The concession contract was signed in September 2005 and Binacional Andino consortium took over the operation of Red Vial Number 6 in December 2005. The contract was granted through a competitive tender organized by ProInversion, the Peruvian privatization agency. Concesionaria Vial del Peru won the tender by offering the highest share of monthly gross revenues to the government (18.6%) after the first highway expansion was completed but no later than the fifth concession year. Before that, the concessionaire had to pay 1% of its monthly gross revenues to the government. Three other consortia submitted final bids: Consorcio Vial 6 formed by Grana y Montero and JJC Contratistas Generales, Argentineans Vialco, and BrazilianConsorcio Planova-Schahin. The government provided the concessionaire with a minimum revenue guarantee as follows: 9.2 million Axes multiplied by current toll during the first four years of concession 10 million Axes multiplied by current toll during the fifth and sixteenth concession year 12 millions Axes multiplied by current toll during the seventeenth concession year and the end of the concession period. None None