Privatization - Colombia

Ferrovias Restarts US$300mn Atlantico Rail Sale

Ferrovias Restarts US$300mn Atlantico Rail Sale

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Colombia's state railroad company Ferrovias has registered a Request For Proposal (RFP) with the Chamber of Commerce for a concession to upgrade and operate the Red del Atlantico (RdA) railroad from Colombia's capital Bogota to Santa Marta on the Atlantic coast. Last year authorities awarded RdA to Colombia's Ferrocarriles de Paz (Fepaz) but were forced to revoke the concession after Fepaz failed to meet a May deadline to incorporate an operating company. Ferrovias president Luis Diego Monsalve announced an aggressive overseas promotion campaign that would capitalize on ministerial and presidential overseas tours to sell the railroad concession. Bids will be accepted from February 9 to April 12, and the winning consortium announced June 18. The total investment required to upgrade RdA is between US$250mn and US$300mn over five years, depending on the amount of public financing, Monsalve said. Under the current proposal Colombia's government would contribute US$98mn toward the project. Ferrovias has raised the railroad's freight capacity forecast from today's 6 million tonnes per year to 19 million tonnes by the year 2006. "The freight levels alone make it a viable concession, " Monsalve said.