Peru
News

Lima airport expansion faces further delays

Bnamericas Published: Thursday, March 01, 2018

Lima Airport Partners (LAP), whose US$1.5bn expansion of Lima's Jorge Chávez airport has been delayed over the past 10 years, has yet to gain access to defense ministry lands needed for the project.

The government hopes to secure an agreement for the land, currently part of air force base Grupo Aéreo No. 8, with the defense ministry next month, transport and communications minister Bruno Giuffra said. LAP, meanwhile, said it planned to award the expansion contract in the second half of the year.

A 60,178m2 terrain a local family ceded was originally allocated for a road, but became the subject of litigation when it was reassigned to the airport, according to Giuffra. The original owners are now demanding fair compensation, he said.

"We're all very concerned about the congestion at the airport and we're working on the best way to solve it while the expansion is ongoing," Giuffra told Lima-based newspaper Gestión. "The general accord was signed a month ago and now it's the turn of the specific agreement."

LAP and the government signed a contract addenda in July 2017 ensuring that surrounding land would be expropriated for a second runway and terminal building. The project, which was held up by delays over land expropriation and permitting, underscored the bureaucratic obstacles facing many infrastructure projects in Peru.

President Pedro Pablo Kuczynski, who will mark his second year in office in July, seeks to unlock US$25bn in blocked infrastructure projects and attract foreign investment to reactivate the country's stalled US$200bn economy.

Lima's airport handled 18.8mn passengers in 2016 and 9.7mn through the first half of 2017, according to LAP. The company has paid US$1.9bn to the state and invested US$373mn in upgrades since it took over the concession in 2000. Today, the airport serves 35 airlines which handle 23 domestic and 46 international routes.

LAP is controlled by Fraport (70.01%), World Bank division IFC (19.99%) and Peruvian investment fund AC Capitales (10%).

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In other infrastructure news, the finance ministry authorized an additional 699mn soles (US$215mn) for the 2018 budget to be allocated to regional governments for infrastructure projects. An additional 60.6mn soles were also authorized for the transport and communications ministry's road projects, according to a notice published in state gazette El Peruano.

The government set a 157bn-sol budget for 2018, of which 26% has been earmarked for infrastructure, including 16.7bn soles for the transport ministry and 2.42bn soles for housing and construction. Separately, 7bn soles has been allocated to flooding reconstruction.

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  • Company: FLSmidth Perú
  • FLSmidth S.A.C. (FLSmidth Peru) is a subsidiary of FLSmidth & Co. A/S, the Danish supplier of equipment and services for the global cement and minerals industry. Headquartered i...