Paraguay awards US$500mn PPP contract to expand roads

Paraguay's public works ministry (MOPC) has awarded the 30-year contract for the eagerly anticipated expansion project for highways No. 2 and No. 7 to consortium Sacyr-Mota Engil-Ocho A, involving total investments of US$520mn, including the design, finance, construction, maintenance and operation.

The announcement was made in Mburuvicha Roga by public works minister Ramón Jiménez Gaona, finance minister Santiago Peña, technical planning secretary, José Molinas and attorney general Roberto Moreno.

This is the first project to be developed under the PPP model in the country since the approval of the relevant legislation three years ago.

"We are very happy to accompany the national government in this first experience of contracting via a public-private partnership," said minister Gaona in a government press release.

The consortium is comprised by Spanish, Portuguese and Paraguayan companies. The works on the highways are expected to begin in the second half of 2017.

Highways No. 2 and No 7 are part of the country's main transport corridor for domestic production. Expansion of these roads will reduce travel time between Ypacaraí and Pastoreo to 2 hours, and by doubling the width of the section to Tapé Porá, travel time from capital Asunción to Ciudad del Este will be reduced to a maximum of 3.5hrs.

Initially 11 companies were prequalified to participate in the tender for the project. However, only one economic bid was received by the MOPC for the contract.

It is estimated that more than US$400mn will be made by the consortium over the 30-year concession, close to the same amount it will invest in executing the project.

The works are part of the national government's infrastructure, transport and logistics master plan, and are expected to generate 2,500 direct and 7,500 indirect jobs.