Infrastructure, News

Argentina receives first PPP road project bids of the year

Public-Private Partnership projects (PPP) became a reality this week as Argentina received the first bids for road auctions. After the Government set a new framework, which seeks to attract foreign investments in the country, the PPP road contracts marked the beginning of this type of investments for infrastructure in Argentina.

Under such programs, private companies finance the project and enter into a long-term contract with the state to recoup their investment.

Marval, O’Farrell & Mairal is proud to have been a part of the PPP law from the start. Several of the firm’s partners participated in the drafting of the Law and its regulatory decrees, and Marval is also advising bidders and other constituencies in this project.

On April 24, the bids for six road projects were unveiled. The offerings were issued by ten consortiums formed by seven foreign companies and 19 local firms, and will require around USD 8 billion in investment. On May 10, the economic offers will be opened.

Companies such as Techint, Grupo Roggio, Acciona Concesiones, Motta Engil, Helport, Copasa and Cartellone are among the bidders. The contracts will be awarded by June 1, 2018. No more than two of the projects can be awarded to each consortium.

The road projects total around 7,000 kilometers, and the first stage includes more than 2,500 km of roads, with USD 6 billion in upfront investment and USD 2 billion in maintenance. The provinces of Buenos Aires, Córdoba, Santa Fe and La Pampa will be part of this first stage.

Currently, Argentina’s road structure is comprised of 12% of highways, 6% of semi-highways and 82% of regular roads. It is expected that, due to the PPP program applied, the percentage of highways will reach 54% and semi-highways 4%, over the next five years.

Santiago Carregal

Partner

C.V.

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