Rodoanel Mario Covas Western Beltway

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On June 1, 2008, the Concessionaria do Rodoanel Oeste SA officially began its 30-year concession with the State of Sao Paulo to build, rehabilitate and operate the the Rodoanel Mario Covas Western Beltway in the State of Sao Paulo. The 32km stretch was to link Regis Bittencourt, Raposo Tavares, Castello Branco, Bandeirantes and Anhanguera highways. Works included: building side roads between the Padroeira and Raposo Tavares exits, construction of a fifth additional lane between the highways Castello Branco and Raposo Tavares, upgrade and maintenance for 6km of the Carapicuíba side road, three additional footbridges and improved accesses from the Castello Branco highway and the Padroeira intersection. In 2008, approximately 145,000 vehicles a day were estimated to circulate on this stretch, 78% of which are cars, 21% trucks and 1% buses. Concessionaria do Rodoanel Oeste SA was formed by CCR [Brazil, 95%] and Encalso Construcoes [Brazil, 5%]. The concession contract was initially awarded to the Consortium Integracao Oeste on March 11, 2008 by the State of Sao Paulo through an international competitive tender in which the lowest toll was the bidding criteria. Five firms submitted bids: The Integracao Oeste Consortium presented the lowest toll fare of 1.16 reais (US $0.63), 61% lower than the ceiling stipulated for the bidding contest, which was 3 reais (US $1.64); Metropolitano submitted a toll of 1.26 reais, the Triunfo and Iberpistas consortium took third offering 2.17 reais; fourth place was for Queiroz Galvao with 2.24 reais and Spanish OHL was fifth with 2.28 reais. However, the winning bid was challenged by the consortium Metropolitano (formed by BR Vias, Cibe and Odebrecht), which requested more information about the winning proposal. On May 7, 2008 ARTESP, the Comission for Processing and Judging Proposals, officially declared Consortium Integracao Oeste the winner of the concession. According to the bidding rules, the winning firm was to pay 2bn reais (US $1.09bn) within the first two years of the contract to the state government and invest approximately 465mn reais (US $232.5 million) in the beltway of which 280mn reais (US $153 million) to be invested during the three first years. The concession fee paid to the state government by the concessionaire was earmarked to finance a separate project, the state’s construction of the southern stretch of Rodoanel Beltway. After contract signing in June 2008, CCR indicated a bridge loan financing was to take place of US $398.3 million for a 180-day term. Long-term financing was anticipated at US$582.1 million (Term A and Term B facilities). The term of the loans were to be up to 7 years and renewable for 8 years. The debt to equity ratio was estimated at 75:25. On December 17, 2008 all tollgates were opened and the stretch started commercial operation. In December 2009, a total of US$ 940 million was raised from several financial institutions: IADB (US$100 million), JBIC (US$200 million) and other banks (US$200 million). In the domestic market, another US$ 375 million (BRL750 m) was raised from Bradesco Bank. These resources will be used to finance the construction works and the cannon payments. 2008 IMF Period average, market rate figures used to convert from Brazilian Real