State Highway MG-050

Active

Prospective

On May 29 2007, Equipav SA Pavimentacao, Engenharia e Comercio signed a concession contract with the state government of Minas Gerais to operate, conserve, maintain, improve and widen the 372km MG-050 highway in the state of Minas Gerais for 25 years. The MG-050 highway connected the capital of Minas Gerais, Belo Horizonte with the border of Sao Paulo state. The contract included service on the BR-491 and BR 265 highways. It serviced 50 municipalities and 7.4% of the population of the state. The MG-050 highway was offered as a Public-Private Partnership in which the state government would provide fixed periodic payments to the concessionaire to make the project attractive to the private sector. The call for tenders was launched in April 2006 and five bidders presented proposals. Of the original five, two consortia were disqualified for technical reasons. In addition to technically qualified, bids were evaluated based on the amount of fixed government payments in their respective proposals. The three final bidders were: • Cowan-OHL Brasil-Barbosa Mello, comprised of the companies: Construtora Cowan SA, OHL-Obrascon Huarte Lain Brasil SA Construtora Barbosa Mello SA (R$ 33,2 million/year) • Construcap-Ferreira Guedes, comprised of the companies: Construcap-CCPS Engenharia e Comercio SA and Construtora Ferreira Guedes SA (R$ 35 million/year) • Equipav SA Pavimentacao, Engenharia e Comercio (R$ 7.89 million/year) Equipav SA Pavimentacao, Engenharia e Comercio won the tender by offering the lowest amount of fixed government payments at US $3.69 million/year (R$ 7.89 million/year). The present value of the subsidy totaled US $33 million for the 25 year concession. Total investment in the project was estimated at US $366 million (R$ 712 million), the majority of which was to be invested during the first five years and was to be 60% financed by BNDES. Equipav SA took possession of the highway after contract signing. Counterpart financing was to be immediately disbursed while tolls would be charged after one year of renovations. The concession was set to expire in 2032. In August 2014, the sponsors were granted a US$ 42.5 million (BRL 100 million) bridge facility provided by Banco Santander and Banco Itau. Figures converted using the market rate, period average published by the IMF for the period of 2007. Cash support calculated using a discount rate of 10% over the 25 year period.

Transport

World Bank Group

Project

Road, Bridge, Government, Manufacturing (Industrial)