Suape Expressway

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In April 2011, Consorcio Suape Rodovias was awarded in a competitive bidding process the contract to build and operate a 45-km expressway linking the highway BR-101 South to the Suape Port (state of Pernambuco). Consorcio Suape Rodovias was established as a partnership of the Brazilian company Invepar Investimentos e Participacoes (50%) - a partnership of the construction company OAS, 25%, state-owned companies and banks pension funds, 75% - and the Brazilian group Odebrecht (50%). A special purpose company named Concessionaria Rota do Atlantico was created to manage the project. The 35-year contract was signed with the regulatory agency in July 2011. Besides Consorcio Suape Rodovias, only another company took part in the contest: the Brazilian company Queiroz Galvao. The bidding criteria set by the regulatory agency was the lowest toll rate and the highest investment amount. Consorcio Suape Rodovias presented the lowest offer, a toll rate of US$ 1.54 (BRL 3). The total investment in the project was estimated at US$ 230.5 million (BRL 450 million), and was financed with a US$ 32.4 million (BRL 63.3 million) loan from the state-owned bank BNDES granted in June 2012. The company was granted the right to take part in the government program called Regime Especial de Incentivos para o Desenvolvimento da Infra-Estrutura (Reidi). Companies selected to take part in this program were given tax cuts in the acquisition of capital equipment and construction material acquired both in the domestic and international markets (this incentive represented a cost reduction of about 9.25%). In addition, the company was allowed to use accelerated depreciation methods of accounting for construction expenditures. Construction works commenced in November 2012 and were expected to be completed by November 2013. Operations commenced in January 2014. In February 2014, the state-owned bank BNDES approved a US$ 55.5 million (BRL 180.5 million) to the sponsors.