Spotlight: The companies racing for Peru's US$565mn central highlands railroad

Peru is preparing to award a US$565 million public-private partnership (PPP) to modernize and upgrade the Huancayo-Huancavelica railroad through the central highlands, with three bidders vying for the contract.

Two consortiums, Ferrocarril HH and Ferroviaria del Centro are in the running for the 129km line, along with Portuguese company Mota-Engil, with the winner due to be announced on August 27.

According to private investment promotion agency ProInversión, nine companies initially showed interest in the project, which will connect Junín and Huancavelica regions with both passenger and cargo operations. However, only three met the financial and prior experience requirements set by the agency.

The latest update indicates the total project cost will be US$565mn, comprising US$445mn in primary investment and US$120mn for operation and maintenance over the first 10 years. The contract will be for 30 years. 

BNamericas takes a closer look at the companies participating in the public tender: 

CONSORCIO FERROCARRIL HH

This group is a partnership between Spanish company S.A. de Obras y Servicios Copasa and local firm Ferrocarril Wanka. 

Copasa has built more than 1,600km of railroads in countries including Saudi Arabia and Spain. Although it has not previously participated in rail projects in Peru, it built Jaén hospital in the Cajamarca region. 

As of the end of 2022, Copasa reported a project backlog of 2.52 billion euros (US$2.8bn), with more than half of its projects located outside Spain. In Latin America, the company has also undertaken projects in Chile and Mexico, according to its website. 

Ferrocarril Wanka was registered with national customs and tax administration agency Sunat in October 2020 and it began operations in June this year. Although the company does not yet have an official website, it shares a tax domicile with Ferrocarril Central Andino, which operates the 535km Lima-Huancayo-Cerro de Pasco rail line.

CONSORCIO CONCESIONARIA FERROVIARIA DEL CENTRO

This consortium is formed by Peruvian company Construcción y Administración (CASA) and Ecuadoran firm Hidalgo e Hidalgo (HeH). CASA has been operating in Peru for 43 years, while HeH has been running for over 50 years. 

According to CASA's website, the company currently holds concessions for 954km of highways, a river port, a land transport terminal and a waterway concession in the Peruvian jungle. CASA has built and modernized more than 3,430km of roads and maintained over 6,700km.

Meanwhile, according to the BNamericas project database, HeH has been involved in 33 projects involving investments of around US$3.4bn across Ecuador, Colombia, Honduras, El Salvador, and Peru. In Peru, HeH was involved in the construction of the Autopista del Sol highway in La Libertad region, the Juliaca-Puno highway, and Yurimaguas port in Loreto. These three projects involve investments of over US$600mn. 

MOTA-ENGIL

The Portuguese company, which has a subsidiary in Peru, has a strong presence in the region. According to its website, Mota-Engil Perú has completed two rail projects in the country: the Pillones transfer station for Minera Las Bambas and the Joya transfer station expansion, as well as carrying out numerous infrastructure works for mining, port and road developments in more than 50 projects. 

Globally, Mota-Engil has a project backlog of 13bn euros, with its key projects including the construction of rail lines in countries such as Mexico, Colombia and Portugal, as well as various African nations. In Latin America, its most significant projects include multiple sections of the Maya train in Mexico and metro lines No. 4, No. 5, and No. 6 in Monterrey, also in Mexico.