enabling environment for private finance of...

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2011/FMP/CON/005 Session 3

Enabling Environment for Private Finance of Infrastructure

Submitted by: Peru

Conference on the Framework and Options for Public and Private Financing of

Infrastructure Washington, D.C., United States

22-23 June 2011

ENABLING ENVIRONMENT FOR PRIVATE

Christy García Godos

FINANCE OF INFRAESTRUCTURERailways and Ports Projects Manager

LEGAL FRAMEWORK FOR PRIVATE INVESTMENT PROMOTION


Political Constitution of Peru. Law on Legal Stability of Foreign Investments. Law for the Promotion of Private Investment in State‐owned

Companies

Framework Law for Private Investment Growth. Framework Law on Public‐Private Partnerships

Law on Works for Taxes.


STATE POLICIES FOR PRIVATE INVESTMENT PROMOTION

ECONOMIC REGIME FOUNDATIONS:

Social market economy.

Freedom for private initiative.

Freedom of contracts and law contracts Freedom of contracts and law contracts

Equality for national or foreign investment.

Free transfer of factors and capitals

Subsidiary role of the State.

FRIENDLY INVESTMENT ENVIRONMENT

Peru offers a favorable legal framework for foreign investment ... Recognition of a favorable Investment environmentfavorable Investment environment

Non discriminatory treatment. Peru offers to foreign investor the same treatment as local investors.

Unrestrictive access to most economic sectors *

Free transfer of capitalFree transfer of capital

Free competition.

Guarantee for Private Property

Freedom to purchase stocks from locals.

Freedom to access internal and external credit.

Freedom to pay royalties.

Network of investments agreements and member of ICSID and MIGA

Legal Stability Agreements Legal Stability Agreements

Peru is adherent to the OECD Declaration on International Investment and Multinational Enterprises.

*Investments that require authorization: Located within 50 km in the border line and those destined to arms, ammunitions and explosive. Likewise, a principal local partner for investments in radio and television as well as in air transport is required

Legal Framework: Constitutional provisions, “Law for the Promotion of Foreign Investment”, Legislative Decree N° 662, “Framework Law for PrivateInvestment Growth”, Legislative Decree N° 757, “Law for the Promotion of Private Investment in Infrastructure and Public Service Works”, Approvedby Supreme Decree N° 059‐96‐PCM

principal local partner for investments in radio and television as well as in air transport is required.

CONDITIONS TO PROMOTE THE DEVELOPMENT OF THE CONCESSIONS

SUITABLE LEGAL POLITICAL WILL VECTORSUITABLE LEGAL FRAMEWORK*

POLITICAL WILL VECTOR(PROINVERSIÓN)

TECHNICALLY POSIBLE

ECONOMICALLY BANKABLEECONOMICALLY BANKABLE

SOCIAL AND POLITICALLY ACEPTABLE

BASICS

COMMERCIALLY PROMOTER

*D. Leg. 662 ‐ Approves the legal stability regimen of foreign investmentD. Leg. 674 – Prívate Investment PromotionD. Leg.757‐ Approves the Framework law for Private Investment growth

MODALITIES OF PRIVATE INVESTMENT PROMOTION

PPPPPP

PRIVATE INITIATIVES

LAW N° 29230: LAW N° 29230: WORKS FOR TAXES

GENERAL CHART OF A CONCESSION PROCESS

Promotion Plan

Q i d Bidding Documents Queries and answers

ContractShort listing bidders

Suggestions and queries from the

bidders are collected

Q lifi ti f t h i lQualification of technicalproposal

Economic Proposal Award

CHARACTERISTICS OF THE PROCESS

Recognition of the investors skills

Open statements are delivered and the development of comprehensive project bid is promoted.

Access to the concession processs information published in the web site

The documentation is available on Proinversión’s web site.

The sale of Bidding Documents is a nonprofit action.

Transparency in the short listing requirements

In the Bidding documents are established the short listingrequirements to be met by the bidders.

Financial , legal and Technical (construction or operation)requirements are mandatory.

Administrative flexibility During the concession process, the power of the legalrepresentative of the bidder is not necessary to be registered inAdministrative flexibility representative of the bidder is not necessary to be registered inthe Public Registry. Is required only for the winner of the bid,before signing the contract.


The concessionaire develop the final studies to perform the

Comprehensive projet bid works.

Responsible of the design.

Suggestions and queries to be included in the BiddingMarket interaction Suggestions and queries to be included in the Biddingdocuments and/or concession contract are accepted.

The quality in the provision of services is required. The concession contracts established the minimum level met by theLevel of services concession contracts established the minimum level met by the concessionaire: index of bumpy texture, waiting time for vessels in ports, among others ( FRA, IATA, etc.)

Competition factor Lowest : Tariff or service cost or State contributions

Competition factor Higher: Works or State retribution


Implies the restoration of economic and financial balance in theFinancial and Economic Balance

Implies the restoration of economic and financial balance in theevent that the State issued rules or laws that affect revenues orcosts of the concessionaire

Settlement of disputesInternational arbitration law, in accordance with the Rules ofConciliation and Arbitration of the International Centre forSettlement of Investment Disputes ‐ CIADI

FAVORABLE CLIMATE FOR INVESTMENT

PRIVATE INITIATIVES

D.L. 1012 Framework Law on Public-Private Partnerships for the Generation of Productive Employment

Public, transparent and fast process whereby a company identifies a private investment opportunityin State-owned resources (assets, public utilities, infrastructure projects, etc.), develops a projectand submits it before the State seeking to be awarded the contract.

Private initiatives are carried out based on projects to invest in assets, companies, projects,services, infrastructure and public utilities public works, and will not be able to request financialguaranteesguarantees.

Private initiatives may be submitted by national or foreign legal persons, as well as byconsortia made of legal persons or consortia of natural persons with legal persons.

FAVORABLE CLIMATE FOR INVESTMENT

PRIVATE INITIATIVES

D.L. 1012Framework Law on Public‐Private Partnerships for the Generation of Productive Employment

Process

Submission of initiative

EvaluationIf no interested third party

Direct award to bidder • Participants must

express their interest inDeclaration of interest

• Publication (90 cd)

If there is one or more interested third parties

Public Tender

express their interest in writing and submit warrant bond.

• Bidder has right to Publication (90 cd)

• Submission of Warrant Bond (10 cd)

third parties tiebreak in 15 cd with the best proposal

AWARDED CONCESSIONS1995‐20101995 2010

TO DATE 69 PROCESSES HAVE BEEN AWARDED FOR A TOTALTO DATE, 69 PROCESSES HAVE BEEN AWARDED FOR A TOTALINVESTMENT AMOUNT OF US$ 10.56 BILLION…

No. OF TRANSACTIONS INVESTMENTSECTOR

No. OF PROCESSES

TRANSACTIONS(US$ million)

INVESTMENT(US$ million)

AIRPORTS 3 ‐‐ 1,591.0AGRICULTURE 1 ‐‐ 184.8

TELECOMMUNICATIONS 17 337.7 259.2

ENERGY 13 258.9 1,645.4HYDROCARBONS 8 443.2 2,828.8RAILROADS 1 ‐‐ 157.0PORTS 3 10.9 879.8SANITATION 4 ‐‐ 442.4TOURISM 4 6.6 24.3ROADS 14 ‐‐ 2,556.2TOTAL 69 1 057 3 10 568 9TOTAL 69 1,057.3 10,568.9

COMPETITIVENESS Infrastructure - PPP

ENERGY18 Projects granted in

concession

CONCESSSION US$ MM

Mantaro – Socabaya T.L. (1998) 179

Socabaya – Moquegua; Moquegua – Tacna; y Moquegua – Puno T.L. (1999) 74.5

Oroya-Carhuamayo-Paragsha -Derivación Antamina (220 Kv) T.L.; and Aguatia-Pucallpa T.L.(138 Kv) (2001) 65.4

ETECEN and ETESUR (2002) 10.5

Carhuamayo – Carhuaquero T.L.(2008) 106.14

Mantaro – Caravelí – Montalvo T.L.; and Machu Picchu Cotaruse (2008) 181

Chilca – La Planicie – Zapallal T.L. (2008) 52.2

Zapallal – Trujillo T.L. (2009) 167.5p j ( )

Energy Supply from New Hydroelectric Power Stations (2009) 300

Chilca Marcona Montalvo T.L. (2010) 291

Tintaya- Socabaya T.L. (2010) 43.5Strengthening of the North System between Talara and Piura (2010) 14.5

Hydroelectric Power Plant of Santa Teresa (2010) 180Machupicchu –Abancay-Cotaruse 220 kV T.L. 62.5Cold Power Generation Reserve 300

US$ 4,061.3 MM INVESTMENT

COMMITMENT.

Cold Power Generation Reserve 300Energy from Hydroelectric Power Stations 500 Mw. 1,822Trujillo - Chiclayo 500 kV T.L. 101.4Cold Reserve: : Plant of Eten 110.0

COMPETITIVENESSInfrastructure - PPP

CONCESSIONS US$ MM

AIRPORTS3 Concessions CONCESSIONS US$ MM

Jorge Chávez International Airport (2000) 1,214

First Group of Regional Airports (2006) 120

3 Concessions

First Group of Regional Airports (2006) 120

Second Group of Regional Airports (2010) 257

US$ 1 591 MM US$ 1,591 MM Investment

Commitment

COMPETITIVENESS Infrastructure - PPP

6 Projects granted in concessions

US$ 44.1 MM

Consorcio Portuario Yurimaguas(2011)Yurimaguas-Nueva Reforma Port Terminal

TERMINALES PORTUARIOS EUROANDINOS PAITA (2009)Paita Port Terminal

US$ 231.8 MM

DP WORLD PERÚ (2006)Containers terminal – South dock US$ 617 MM

US$ 120.3 MM

CONSORCIO TRANSPORTADORA CALLAO (2010)Load terminal of Concentrated Ores

US$ 1 792 MM

TISUR (1999)Matarani port US$ 31 MM

US$ 1,792 MMInvestment

Commitment..

US$ 748.7 MM

CONSORCIO APM TERMINALS (2011)North MultipurposeTerminal of Callao

CONCESSION US$ MM

COMPETITIVENESSInfrastructure - PPP

ROADS 11 Concessions

CONCESSION US$ MMNORVIAL (2002)Road network Nº 5 183 Kms 73.1COVIPERU (2005) Road network Nº 6 222 K 228 6Kms 228.6IIRSA Norte S.A. (2005)Paita – Yurimaguas 960 Kms 218.9

Interoceánica Sur (2005)Section2 300Kms 263.0S ti 3 403 K 332 4Section3 403 Kms 332.4Intersur (2005)Section4 306 Kms 214.6Concesión Canchaque (2005)Buenos Aires-Canchaque 78 Kms 31.1

C i I t á i (2007)Consorcio Interoceánico (2007)Section 1 758 Kms 98.9

Concesionaria del Sur (2007)Section 5 827 Kms 183.4

CONALVIAS-INFRACON (2008)O l Ch H l A 47K 34 2Ovalo Chancay – Huaral – Acos 47Kms 34.2OHL (2008)Road network Nª 4 356Kms 370

OBRAINSA (2009)Nuevo Mocupe – Cayaltí – Oyotún 77Kms 17 4

US$ 2,556.7 MM en Investment Commitment

(5,369 Kms)

Nuevo Mocupe – Cayaltí – Oyotún 77Kms 17.4CONCESIONARIA VIAL DEL SOL (2009)Autopista del Sol road475Kms 365.1IIRSA Centro, Section 2 (2010) 377Kms 126.0

COMPANY / PROJECT TRANSACTIONS US$ MM

INVESTMENTUS$ MM

Buenaventura Mining company 1 510 707

MINING SECTOR

OVER 40 PROJECTS Buenaventura Mining company 1,510,707 Condestable mining company 1,291,101 Hierro Perú 120,000,000 137,000,000 Quellaveco 12,000,000 562,000,000 Cerro Verde 35,446,690 485,300,000 Refinery of Ilo 66,626,249 20,200,000 Tintaya 277,105,731 104,000,000 Cajamarquilla refinery 154,946,156 50,000,000

OVER 40 PROJECTS

Cajamarquilla refinery 154,946,156 50,000,000 Minero Perú - Viviendas de Ilo 1,329,009 Centromin – Paucaray gold deposit 211,500 Centromin – Antamina Mining project 20,000,000 2,520,000,000 Yauliyacu S.A. Mining company 8,507,416 110,200,000 Centromín - La Carcajada and Perro Ciego 1,050,000 Minero Perú - Las Huaquillas 945,000 1,900,000 M t l i f O S A 121 521 329 Metalurgic company of Oroya S.A. 121,521,329 Mahr Túnel S.A. Mining company 127,777,777 60,000,000 Berenguela deposit 750,005 770,000 Cobriza S.A. mining company 7,500,001 Minero Perú – INIFOM Concession 951,000 Paragsha S.A. mining company (Cerro de Pasco) 61,777,777 70,000,000 Minero Perú - Ccayo Huinicunca 207,270 Centromín Quicay Mining prospect 300 000 10 729 334 Centromín – Quicay Mining prospect 300,000 10,729,334 Minero Perú - Magistral prospect 550,000 2,100,000 10 Miners prospects 227,000 25% shareholding at ISCAYCRUZ 18,645,960 IMEX Callao 1,000,000 Centromín - Yauricocha Mining unit 4,010,000 3,000,000 100% acc. Logística Integral Callao S.A. y YauricochaS A 750,000

Pacific Ocean

S.A. ,

Centromín - Proyecto Alto Chicama 118,474,162 12,113,759 3 Mining prospects 138,000 Natividad mining Company 1,000,000 3,000,000 Mining prospects (Huarangayoc/Pira y Winicocha) 183,000 Mining prospects (Mishky/Tinoray, Puy Puy y Yanacollpa) 560,654

L B b j t (O ti ) 97 500 000 300 000 000Las Bambas project (Option) 97,500,000 300,000,000Bayóvar project 3,000,000 566,000,000 Cuprífero La Granja project 61,300,000 2,500,000,000 Michiquillay mining project 412,000,000 2,500,000,000 Bayóvar (Second phase) 460,000 Toromocho project 2,000,000 2,152,269,000Las Bambas 63,000,000 4,200,000,000

US$ 17,715 Million in Investment

Commitment.

SANITATION SECTOR

05 Projects granted in concession

CONCESSION US$ MM

Chillón project (2000) 80.0

Drainage and potable water services (2005) 73 0Drainage and potable water services (2005) 73.0

Potable water supply for Lima (2008) 76.9

“Taboada” sewage treatment plant (2009) 212.5

Planta de Tratamiento de aguas residuales y emisor Planta de Tratamiento de aguas residuales y emisor submarino "La Chira“ (2010) 105.1

Pacific Ocean

US$ 547.5 MM Investment

project

www.proinversion.gob.pe