LatAm 2003 infra wrap

Even with elections and changes of governments in many Latin American countries this year, infrastructure news ploughed forward. The following is a summary of highlighted events in the region during 2003. BRAZIL Brazilian President Luiz Inacio Lula da Silva has now completed one year of his administration, after being elected in late-2002. Under his administration, the federal transport ministry and Sao Paulo state governments signed an agreement to push forward a 750mn reais (US$262mn), 66km rail beltway project for Sao Paulo city, dubbed Anel Ferroviario de Sao Paulo (Ferroanel). Also, the state-owned metro company CMSP and local bank Unibanco signed a financial advisory services contract to study the feasibility of putting the US$1.26bn, metro line 4 in Sao Paulo out to concession. The first phase entails five stations and the purchase of 16 trains, and will start operations in 2006, and, once fully operational, will carry 890,000 passengers/day. DNIT has completed a final report of a project to improve access to Santos port in Sao Paulo state, estimated at 800mn reais (US$271mn) and segregating rail and highway traffic towards the port, as well as diverting heavy vehicles away from municipalities. Santos is Brazil's most important port. In Rio de Janeiro state the World Bank (WB) gave its no-objection to a short list of companies to carry out feasibility studies for the 3bn real (US$1.02bn) line 6 of Rio de Janeiro city's metro, with economic offers due January 6. The 35km line will have 17 stations, with some 400,000 passengers/day and construction is expected to begin in 2005 and finish after 2009. ARGENTINA Nestor Kirchner, from chilly Santa Cruz province, became President of Argentina in May, after former president Carlos Menem withdrew from the presidential run-off a few weeks earlier. Despite economic woes and political changes, the country saw big projects come to fruition, as the federal public highway department awarded six maintenance contracts for five-year periods, covering 7,951km, 59% of which are in need of immediate attention and comprise the key arteries for the flow of goods between the capital and Argentina's interior. In rail news, Portugal is committed to helping push forward Argentina's Trasandino del Sur rail project, according to Portugal's ambassador Antonio De Almeida Riveiro. In general terms, the US$200mn-plus Trasandino railroad would run from Zapala to Las Lajas in Neuquen province, cross the border into Chile to the town of Lonquimay in Region IX, and on to Talcahuano, a major port in Region VIII. CHILE Chile's government will build a new airport to replace the Cerrillos facility in Santiago, which is set to close by January 2005. It would be built 20-25km southwest of the current Cerrillos airport and could cost US$50mn-60mn, and would have to be able to handle close to 80,000 flights/y. Construction continues on the new line 4 of Santiago's state-owned metro system. Work on the US$1.03bn, 33km line began in July last year and is scheduled to wrap up in 2H05. The track will extend from Tobalaba station in Las Condes in Santiago's east, through 22 stations to the municipality of Puente Alto, on the southeastern outskirts of the capital. It will have a complementary stretch, that will connect at line 4's halfway point and continue southwest to municipality La Cisterna, the new southern terminus for the extended line 2. Metro SA also announced the 4Q03 launch of a US$201mn, 47km extension project for the system's line 2, after securing a US$200mn loan from a New York-based bank for the project. The ministry announced line 2 would extend underground, instead of running aboveground as a light rail line, saying that an underground metro can move 45,000 passengers/hr compared to the proposed light rail system's capacity of 12,000 passengers/hr. PARAGUAY Continuing through the southern cone, Paraguay's new President Nicanor Duarte took office in mid-August, replacing Luis Gonzales Macchi. Duarte signed an agreement with Brazil's President Lula for the US$100mn-130mn construction of a second bridge over the Parana river. Debt-payment problems between the government and the JBIC had kept the process from moving forward. Works on the US$51.3mn western corridors program "Corredores de Integracion del Occidente" were set to begin in December, involving basic works, drainage improvement and paving in the departments of Boqueron and Alto Paraguay, while consolidating the most important road corridors and increasing agricultural produce flow in the sparsely populated western departments. URUGUAY The Cerealsur consortium took over operation of Uruguayan capital Montevideo's Carrasco international airport in November. The 30-year concession envisages investments of US$75mn for works such as enlarging and rehabilitating the main runway, and building new cargo and passenger terminals. A little over 566,000 passengers passed through Carrasco last year, along with 20,238t of cargo. BOLIVIA In mid-October, Carlos Mesa became President of Bolivia, after a nearly month-long bloody revolt by the country's indigenous majority, forcing Gonzalo Sanchez de Lozada to resign. The services & public works ministry kicked off a US$107mn, five-year national highway maintenance program, with US$34.3mn in support from the World Bank. The ministry has already inked contracts with companies R&R and ICA-Bolivia to carry out some works. VENEZUELA Brazilian engineering firm Odebrecht has been hired to carry out technical studies on a third bridge across the Orinoco river in central Venezuela by the country's state heavy industries holding company CVG. The project carries a preliminary price tag of US$300mn, which would be picked up by the Brazilian government. PERU National ports will be one of the sectors to benefit from a US$300mn loan the Inter-American Development Bank (IDB) has approved to promote competitiveness in the country. Programs funded by the 20-year term loan will enhance productivity and cut red tape. New regulations and other measures that result will enable entrepreneurs to start new businesses more quickly, strengthen job training, and streamline commercial dispute resolution. The US Trade & Development Agency (USTDA) will bankroll a US$300,000 feasibility study into a new container terminal at Peru's principal port Callao, as demand there has exceeded operating capacity of some 400,000 TEUs and is currently estimated at 550,000 TEUs. The USTDA estimates the project will result in US$31mn in US exports. COLOMBIA Colombia's government will choose one company from a short list of six consultants to draw up a plan for a concession to upgrade Bogota's El Dorado international airport. The eventual concessionaire will be required to invest US$1bn over 25 years to expand the airport's capacity to be able to handle passenger traffic of 15.7 million in 2025 compared to a forecast 8.4 million in 2005, and almost doubling cargo volume to 862,000t/y. MEXICO Mexico's federal government awarded three contracts worth US$130mn to local constructors to remodel Mexico City's international airport (AICM), helping to extend the facility's useful life. When the modifications are complete in April 2004, AICM will increase handling capacity to 27 million passengers/y from 20 million. PUERTO RICO Three groups have qualified for a design-build-operate-transfer concession for Puerto Rico's US$600mn-700mn Las Americas port (PLA), though other interested firms may still enter the competition, with an operator to be selected by May 2004. Three-year construction works on the 2.2M TEU-capacity port will begin in the Northern Hemisphere's 2004 summer. PANAMA Planned expansions to the Panama Canal will cost some US$8bn. The Panama Canal Authority was expected to release the official expansion study results year-end. Both the Japanese and Chinese governments announced interest in financial participation in the plan to widen and deepen the canal's trajectory, and incorporate a new set of locks, to allow post-Panamax size vessels to use the waterway. DOMINICAN REPUBLIC Operations at the US$300mn Caucedo multimodal port and duty-free zone at Punta Caucedo, on the outskirts of the Dominican Republic's capital Santo Domingo, were launched in December. Phase I will provide 50ha of terminal area, 600m of deep-water berths, and five post-Panamax gantry cranes, among other equipment. EL SALVADOR Finally, 12 companies have submitted expressions of interest to port authority Cepa for construction of the La Union port complex. The Japan Bank for International Cooperation will fund 75% of the some US$125mn project, while the Central American Bank for Economic Integration will finance the remainder. According to the current timeframe, the port is due for completion in August 2006 with work on the second phase expected to start around 2010.