During the first half of this year 2022, it is expected the launching by the Ministry of Public Works and Communications of the prequalification for improving and duplicating 108 kilometers of PY01 Route under Public-Private Partnership (“PPP”) modality. The improvement works begin at 4 Mojones and reach Ytororó, where the duplication starts and goes until the city of Quiindy (the “PY01 Route Project”).
This project includes construction, maintenance and operation of the sections that will be covered by the works and an investment of approximately USD 250 to 350 million is calculated, depending on how many sections of the project are to be improved and duplicated, which is currently being studied by the Administration, now under feasibility analysis
The concession term is expected to be 30 years and will have certain similarities with the PY02 Route Project, in terms of funding (concessionaire income) and financing (financial structure).
It is important to mention that under Decree No. 4183/2020, which regulates Law No. 5102/2013 about PPPs, the prequalification stage of offerors for bids launched under this modality is now mandatory, which means that only those who are prequalified will be able to participate in the competitive dialogue and the subsequent bidding for each project. Based on this, within the framework of PY01 Route, prior to the bidding for the project, a prequalification process for bidders will be carried out.
Another innovation incorporated in the aforementioned decree is the obligation for the Contracting Administration to carry out a competitive dialogue procedure, through which those prequalified may, within certain established term, submit inquiries and make proposals for improvements, additions or adjustments to the bidding terms and conditions and/or proforma of the contract. During this period, the prequalified may be accompanied by their potential financiers, which potentially reduces the risk of future need for bankability addenda to both the bidding terms and conditions and the PPP Contract. This competitive dialogue between the interested parties and the Administration will allow defining the structure of the project and identification of risks that should be assumed by the party that is best prepared to manage it.
It is estimated that during the second half of this year the prequalification and competitive dialogue stages will be completed, which would lead to the publication of the call for bids before the end of the year.
There are other road projects under study that would be tendered in the near future, also under the PPP modality, such as the duplication of PY06 and PY10 Routes and additional road projects to be tendered under concession systems related to sections that are currently contracted under CREMA and GMANS contracts (about 29 sections of PY03, PY07, and PY15 Routes, among others).
For more information please contact Adriana Ocampos (adriana.ocampos@berke.com.py) and/or Martin Carlevaro (martin.carlevaro@berke.com.py).
