Rodovia das Cataratas Toll Road

Active

Prospective

Rodovia das Cataratas SA was awarded a concession contract by the government of the state of Parana in 1997. The bidding process was competitive and the award criteria was the quantity of km of access highways to be rehabilitated by the sponsors. Rodovia das Cataratas is responsible for the rehabilitation of the existing roads, the construction of a 105 Km road connecting Foz do Iguacu to Cascavel and of a 55 Km road connecting Pinheiros to Guarapuava. The initial rehabilitation works have been concluded and the concessionaire started charging tolls in June 1998. The works were predicted to be concluded in 5 years and the return on investment was predicted to be achieved over a 7-year period. The estimated average annual traffic flow is 9 million vehicles. Rodovia das Cataratas was controlled by a consortium led by Civilia Engenharia (a subsidiary of Sideco Americana), with 72% % of the shares; the other private participants are ADM Clemente Faria (10%), DM Construtora (10%), and other companies with small shareholdings. As of August 1998, the concession contract was under renegotiation. As the state government decided to reduce the toll rates, the concessionaire stopped its investment plans and only the rehabilitation works were implemented. Initially, the company expected to invest around US$ 369.6 million during the concession period. In 2003, after the concessionaries that operate in State of Parana failed to reach an agreement with the government to lower the toll rates, the government of the State of Parana enacted a statute to cancel the concession and return the management and operation of the highways to the State. In December 2003, a Federal Court declared that the cancellation should be preceded by an administrative process in order to define the due compensation of the company. In December 2003, Rodovia das Cataratas was controlled by Civilia Engenharia (Sideco), Rossi Participacoes and Momento Engenharia e Construcao Ltda. In January 2004, the governor of the State of Parana enacted an executive decree declaring that the State was authorized to take the voting shares of Rodovia das Cataratas. The government declared that the expropriation would not take place if the company agreed to reduce the toll rates. In April 2004 the federal court ruled that the concessionaire should still operate, thereby overturning the state court decree that took back the concession contract. The concessionaire and the state government renegotiated toll rates (reducing rates by 30 percent) in June 2004 and the contract was operational thereafter. In June 2004, Rodovia das Cataratas reached an agreement with the government of the State of Parana to reduce the toll rates. In exchange, the government agreed to reduce the construction and rehabilitation commitments of the company. The company's investments from December 1997 to June 2004 were US$ 50 million (R$ 150.1 million converted with the 2003/2004 exchange rate). In February 2008, Ecorodovias acquired from Civilia Engenharia a subsidiary of SIdeco Americana (Macri group - Argentina) the Rodovia das Cataratas Toll Road. The deal between the roadway management companies was agreed on Nov 2007, but faced the opposition of the Parana governor. Ecorodovias took over the management of Cataratas and is distribution R$430mil (US$243mn) in promissory notes to pay for the acquisition. The exact amount of the acquisition was not publically available. Ecorodovias was a subsidiary of Impreglio SPA [Itlay, 35%] and Grupo Almeida CR [Brazil, 65%]. The company and the state government are still querreling in courts, particularly with regards to tariff adjustments, as of Dec. 2009. In June 2004, Rodovia das Cataratas reached an agreement with the government of the State of Parana to reduce the toll rates. In exchange, the government agreed to reduce the construction and rehabilitation commitments of the company. The company's investments from December 1997 to June 2004 were US$ 50 million (R$ 150.1 million converted with the 2003/2004 exchange rate).

Transport

World Bank Group

Project

Road, Commercial, Government, Automotive