Peru Steps Up Concession Sales

Peru’s investment promotion agency, ProInversion, plans to move into full gear in July, offering in concession 6 projects prioritized for this year by president Garcia. Juan Suito, ProInversion’s technical director, says the agency will offer transmission lines, back-up energy plants, a hydro plant, 6 airports in the south and an old army barracks in one of Lima’s upscale districts in the coming weeks. “We have moved slowly to guarantee success, but we are confident that in the second half of the year we will meet our targets for 2010,” Suito tells LatinFinance. ProInversion forecasts that the projects will generate approximately $2.5bn this year. Of those set for concession in July, the largest investment would be in the 6 airports. The agency estimates a minimum investment at $226m. All of the country’s principal airports, with the exception of Cusco, will be privatized once the process is concluded. Instead of offering the existing Cusco airport, a separate concession process has been designed for the construction of a new airport. Suito says ProInversion is reviewing the 23 projects originally listed as priorities after additional work showed that several would not be sustainable without government subsidy, which is not an option. “Projects were prioritized with the idea that they would be self-sustainable and we have discovered in the process that several are not, so we have gone back to review these and decide how to move forward,” he adds. Among those under review is the Cajamarca-Bayovar railroad that would allow minerals produced in the highlands to be moved by rail to the cost. A feasibility study determined that the project, initially estimated to cost $1.5bn-$2.0bn, would actually require close to $6.0bn. In the same category are 2 sections of the Pan-American Highway, the country’s principal roadway that runs along the coast. ProInversion is preparing to redo feasibility studies for the northern section, from Piura to the border with Ecuador, and the so