Dragados Wins Santiago Beltway with US$115mn Bid

Friday, December 21, 2001

A group led by Spain's Dragados more than doubled the next highest bid on Friday to win a concession to re-build and operate Americo Vespucio Norte, the northern section of Chilean capital Santiago's beltway.

Dragados - in partnership with Germany's Hochtief and Chile's Brotec, Belfi and Taurus - bid 4.7mn UF (Chile's inflation adjusted financial unit) or some US$115mn, while a consortium led by ACS Chile came in second with a 2.15mn UF offer.

The two other bidders - a consortium of Italy's Impregilo, Chile's Tecso and Fe Grande, and Autopistas Metropolitanas of Spain's Necso and Sacyr - both bid in the region of 1.5mn UF.

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Necessary investment over the 30-year concession is estimated at US$235mn and the winning bidder decided to assume full commercial risk for the project, rather than sharing it with the government.

This latest auction's success reflects that of Chile's concession system, which neither Brazil nor Argentina has been able to emulate, Dragados regional manger Bernardo Diaz told BNamericas on the sidelines of the auction.

"I think the two Americo Vespucio projects will serve as a springboard for development and growth in the metropolitan region," he added.

The Spanish firm now stands to benefit from economies of scale due to its involvement in another Santiago concession, the Norte-Sur highway. Americo Vespucio Norte is the fourth and final concession of the Santiago Metropolitan Region's expressway program, and will bring total investments to over US$1bn in 150km of roads.

Americo Vespucio Norte runs 29km around northern Santiago. Apart from the upgrade of the beltway itself, the project includes the construction and upgrade of minor roads, building and maintaining 19 new intersections, four bridges, and "green zones," plus lighting, sanitation, traffic control and safety features.