Infrastructure - Peru

Peru's ProInversión launches tender for US$5.37bn Lima metro line 2

Peru's ProInversión launches tender for US$5.37bn Lima metro line 2

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Peru's private investment development agency ProInversión has kicked off the bidding process for Lima's US$5.37bn metro line 2, the agency said in an official statement.

The tender entails the financing, design, construction, rolling stock supply, operation and maintenance of 27km of the new underground line stretching east to west from the Ate municipality to Callao port, with 27 stations along the way.

Total costs are estimated in the order of US$5.37bn, including an additional 8km stretch connecting Callao port with the city's international airport Jorge Chávez, which will represent the first milestone in the development of metro line 4. Spending in infrastructure and rolling stock material will make up US$2.9bn and US$871mn, respectively, while the remaining US$1.57bn will cover construction, expropriation and other risks.

A cofinanced public-private partnership (PPP) emerged as the preferable option, according to the prefeasibility study orchestrated by Italian engineering firm Geodata.

"The project is not profitable, meaning that average tariffs cannot cover the investment and operational costs, which makes state involvement in the investment process necessary," the study reads.

"Therefore, we suggest the project be carried out through a PPP, with a concession being the most appropriate option."

Multilateral institutions such as the World Bank's International Bank for Reconstruction and Development (IBRD), German development bank KfW, the Japan International Cooperation Agency JICA and the Latin development bank CAF, which has already pledged its participation, are indicated as potential sources for financing.

ProInversión expects to award the concession contract in July 2013, a well-placed source told BNamericas in a previous interview.