Spanish firms eyeing Peru rail concession

Spanish firms are interested in bidding for a concession to upgrade one of Peru's central Andean railways, a Peruvian official said.

The 30-year concession to operate the 134km Huancayo-Huancavelica railway known as the 'Tren Macho' will involve replacing the track and upgrading railway stations, said Bernardo Muñoz, commercial attaché at the Peruvian embassy in Madrid.

Spanish companies, which have already invested US$10bn in Peru, are on track to invest another US$10bn in projects such as the southern natural gas pipeline, the Lima metro and the port of Pisco, Muñoz said.

About 400 companies led by firms such as Telefónica, Repsol, Enagás, BBVA, Mapfre, Redesur, Abengoa, Acciona and Cepsa operate in Peru. Trade between both countries totaled US$2bn last year, according to the embassy.

Companies, which met with officials from Peru's state investment agency Proinversión in Madrid, are studying projects in telecommunications, logistics, energy, hydrocarbons, health and education, he said.

"There's a great deal of interest and many Spanish companies believe Peru could be an alternative for their globalization and investments in Latin America, using Peru as a hub," Muñoz told state news agency Andina.

PACIFIC ALLIANCE

Peru's economy will be the best performer this year in the Pacific Alliance trading bloc, which includes Mexico, Colombia and Chile, according to an International Monetary Fund report.

Peru's GDP is on track to expand an estimated 3.3% in 2016, compared to Colombia (2.7%), Mexico (2.6%) and Chile (2.1%), the IMF said. Latin America and the Caribbean stands to contract 0.3% this year due to recession in Argentina (-1%), Brazil (-3.5%) and Venezuela (-8%), it said.

The Peruvian economy has managed to continue growing despite coping with "the largest ever" external shocks, Peru's finance minister Alonso Segura said. GDP probably expanded 4% in December after growing at the same rate in November, despite upcoming presidential elections in April, Segura said.

Mining projects and public spending in infrastructure projects will continue to drive growth this year, Segura said. President Ollanta Humala, who is scheduled to step down in July, has awarded a record US$20bn in public-private partnership infrastructure concessions.

"Private consumer demand in Peru weathered the situation better than the countries in the Pacific Alliance, and now there will be a major impetus from mining production that will continue in 2016 and 2017," he said in broadcast comments from the Davos forum. "An election process creates uncertainty in every country in the world, but despite that, the economy has continued to accelerate."