Peru's BCP, Antamina ramp up tax swap infra projects

Peruvian companies in the banking, telecommunications and mining industries have taken advantage of a government drive to spur a tax swap system to start building infrastructure projects such as schools and hospitals.

Banco de Crédito del Perú (BCP), Pacífico Seguros and Telefónica del Perú began work on a 101mn-sol (US$30mn) upgrade of a hospital in Macusani, Puno region, Lima-based BCP said in a statement. The project will benefit 80,000 people in the southeastern highlands, one of the country's most impoverished areas.

BCP, which tops the list of projects in the system known as obras por impuestos with 670mn soles invested in 78 projects to date, said it also plans to build two high performance schools known as colegios de alto rendimiento.

Ica region, meanwhile, awarded a 23mn-sol contract this month to iron ore miner Shougang Hierro Perú to rebuild its emblematic Señor de Luren church, destroyed by an 8.0 earthquake in 2007, state private investment promotion agency Proinversión said in a statement.

Another mining company, Antamina, the top investor in tax swap infrastructure projects this year, was awarded contracts for hospital and irrigation projects this month, Proinversión said.

Antamina will invest 145mn soles to build hospitals in Ancash and Huánuco, the first such contract to be awarded by the health ministry, benefiting a total of 150,000 inhabitants in the northern Andes, Proinversión said. The miner will also equip and maintain the hospitals for five years in addition to providing training for medical personnel.

Ancash regional government also awarded Antamina a 21mn-sol contract to renovate the Carhuascancha irrigation canal, benefitting 1,720 local farmers, Proinversión said.

Antamina, the world's largest combined copper-zinc mine, located in Ancash, has committed 252mn soles to obras por impuestos this year, followed by banks BCP (65mn soles) and Interbank (51.5mn soles), the agency said. Companies have invested a total of 537mn soles in 38 projects so far this year, up almost 80% from the same period last year, according to Proinversión.

The tax swap system has awarded 229 transport, health, education and water infrastructure projects totaling 2.443bn soles (US$720mn) since 2008, Proinversión said.

While BCP tops the list of infrastructure investment since 2008, miners Southern Copper (512.8mn soles), Antamina (338.5mn soles), Volcan (99.7mn soles) and Barrick Gold (33mn soles) are also some of the biggest investors in the system, according to the agency.

President Pedro-Pablo Kuczynski, who took office July 28, has pledged to eliminate all bureaucratic obstacles to US$25bn in delayed infrastructure projects, including railways, roads, airports and ports. Kuczynski's administration also seeks to increase the participation of private companies in the obras por impuestos system.

AREQUIPA

In other infrastructure news, Arequipa region president Yamila Osorio presented US$6bn in investment projects to Spanish investors as part of a government roadshow in Europe, state news agency Andina reported.

Arequipa, home to Peru's second largest city and mining, steel, cement, agro-export, dairy and beer industries, features irrigation projects such as as Majes-Siguas II and Río Arma, the La Joya-Yura highway and three hospital construction contracts, Osorio said.