W W W. P R O I N V E R S I O N . G O B . P E

HUANCAYO HUANCAVELICA RAILWAY GENERAL PRESENTATION February 2019

1 Design, financing, construction - upgrading, procurement of rolling stock, operation and maintenance, and transfer to grantor at the end of the concession term. 2 Compensation for investment in works and rolling stock. 3 Compensation for maintenance and operation.

METHOD

STATE INITIATIVE CO-FINANCED CONCESSION

SELECTION MECHANISM

COMPREHENSIVE PROJECTS PROCESS1

COMPETITION FACTOR

LOWEST ECONOMIC OFFER

(RPI-Works, RPI-

MR2

and RPMO3)

CONCESSION TERM

30 YEARS

AWARDING OF CONTRACT

JULY 2019

CAPEX

US$ 226.9 MILLION NOT INCL. VAT

US$ 267.8 MILLION NOT INCL. VAT

GENERAL ASPECTS OF THE PPP

PROJECT DESCRIPTION

PREPARATION OF FINAL STUDIES & ENVIRONMENTAL CERTIFICATION

UPGRADING OF EXISTING ROUTE

OVERHAUL OF STATIONS

AND STOPS

PROCUREMENT OF ROLLING STOCK

OPERATION AND MAINTENANCE

INTERVENTIONS

DESIGN CHARACTERISTICS:

Maximum Axle Load: 20 tons. Maximum Design Speed: 96 km/h passengers, 64 km/h freight

• Replacement of rails on main route. • Replacement of wooden sleepers with concrete sleepers. • Replacement of railway switches. • Use of existing ballast and installation of new ballast.

• Replacement of bridges with new structures (Cooper E-80).

• Expansion of tunnel clearances.

• Construction of longitudinal drainage system and improvement of transverse drainage system.

• Protection and stabilization of slopes and embankments.

• Repair and improvement of the telecommunications system.

• Railway signage. • Implementation of Operations Control Center.

• Remodeling of Chilca yard and shop for the new rolling stock.

PROJECT SCOPE RELEVANT CHANGES

Current Conditions Characteristic REPAIR IMPROVEMENT

Slopes

Railway • Load-Bearing Cap. • Sleepers • Rails • Ballast

Drainage • Longitudinal • Transverse

Tunnels (38)

Bridges (15)

2015 CALL FOR BIDS

2016 GRANTOR requested

increased load bearing capacity for the FHH railway from 15 to 20

tons/axle

2019 Awarding of

Contract for FHH

Under ED No. 12-2005, the project was exempted from the SNIP,

under the repair regimen. Repair: Performance of the works necessary to return the railway structure to its original geometric and load-bearing characteristics.

Inclusion in Invierte. Pe, under the improvement regimen.

Improvement: Introduction of modifications to the original characteristics of the railway in order to increase its capacity or improve safety conditions and user comfort.

REPAIR CAPEX, not incl. VAT : US$ 204 MM

IMPROVEMENT CAPEX, not incl. VAT: US$ 226 MM

No protective works. Protection with rockfill, rows of riprap, or gabion walls. Protection with rockfill, rows of riprap, or gabion walls.

Limited to 13 tons/axle No uniformity (concrete and wood) No uniformity (70, 75, and 80 lbs./yd.) Poor conditions due to lack of drainge

Increase to 15 tons/axle Use of concrete sleepers only Uniform use of 80 lbs./yd. Replacement of ballast

Increase to 20 tons/axle Use of concrete sleepers only Uniform use of S49 rail profiles (99 lbs./yd.) Replacement of ballast

None Poor conditions, obstructed or no longer present

To be constructed (trenches and intercepting ditches) Existing culverts repairs and new ones constructed

To be constructed (trenches and intercepting ditches) Existing culverts repairs and new ones are upgraded

Narrow clearance dating back to operation with narrow rails (0.914m)

Interventions only to secure sidewalls and/or arches in unsafe conditions

Clearance expanded as per National Railway Regulations, securing of sidewalls and arch

with

Date to 1926 (start of FHH). Metal structure was polished and painted during repair works in 2006.

New. Design using COOPER E80 loading system. New. Design using COOPER E80 loading system.

PROJECT SCOPE RELEVANT CHANGES

Characteristic Current Conditions Project under REPAIR REGIMEN Project under IMPROVEMENT REGIMEN

Stations (7) Conserved. Improved accessibility and passenger comfort. Improved accessibility and passenger comfort.

Stops (20) 19 conservados. 1 paradero (Ccocha) destruído por huaycos.

Improved accessibility and passenger comfort, and restoration of Ccocha stop (PK 88+060).

Improved accessibility and passenger comfort, and restoration of Ccocha stop (PK 88+060).

Signage By radio. Conduction is proceed on sight by radio, with occupation of a vehicle from station to station.

Repair of existing system and maintenance of signage. Implementation of modern signage, safety, and communications system, including the Operations Control Center (CCO).

Safety Only fencing along first stretch of the railway, up to the Chilca Station (first

Installation of safety fences in urban areas, and automatic safety barriers at railroad crossings.

Installation of safety fences in urban areas, and automatic safety barriers at railroad crossings.

Chilca Yard and Shop

station). Limited to minor repairs, with no spare parts for immediate repairs.

Upgraded according to requirements of new rolling stock. Upgraded according to requirements of new rolling stock.

Rolling • 1 locomotive with limited operation. Repair of 2 locomotives and overhaul of 2 Procurement of new rolling stock:

• 2 railcars with limited operation. railcars. • 5 self-propelled DMUs

• Others in state of obsolecence.

Procurement of new rolling stock: • 2 locomotives

Stock

• 5 self-propelled DMUs • 3 passenger cars • 8 passenger cars

• 5 freight cars • 5 freight cars

Maintenance of Railway and Rolling Stock

Corrective only. Preventive and corrective. Preventive and corrective.

Operation • Round Trips • Time in Each

Direction

• 1 round trip, every other day. • Unreliable, around 4.5 – 5 hours.

• 8 round trips per day (6 with DMU, 1 with passenger train, and 1 with mixed train).

• From 2h 42min to 3h 50min, depending on voyage type (direct or stopping at stations and stops).

• 7 round trips per day (6 with DMU and 1 with mixed train).

• From 2h 42min to 3h 50min, depending on voyage type (direct or stopping at stations and stops).

OPERATION IN COMPREHENSIVE STAGE

SERVICE LEVELS

Availability Regularity Railway System

Quality User

Satisfaction Fraud

Prevention

DAILY VOYAGES

FREQUENCY IN EACH DIRECTION ITINERARY STOPS

TRAVEL TIME

Direct passenger DMU 2

Chilca Station to

Huancavelica Station

No intermediate stops

Chilca Sta. Huancavelica Sta

2h 42min

Passenger DMU with stops 3

Stops at all stations 2h 50min

Passenger DMU with stops 1

Stops at all stations and stops 3h 02min

Mixed train 1 Stops at all stations

and stops 3h 50min

Planned Trips Passengers Only: 6 trips per day in each direction

Mixed – Passengers and Freight: 1 trip per day in each direction

CHILCA

Chanca

Retama

Ingahuas i

Huarisca

Parco

MANUEL TELLERI A Pilchac a

Cuenca

Aguas Calientes

IZCUCHA CA

MARISCAL C ÁCERES

Pallcahuayc o

Chunca

Ccocha

ACORIA

Huayas (Bandera)

Silv a

Troya

YAULI

HUANCAVELI CA

Junín HUANCAYO

Huancavelica

Huayucachi

Viques

Paccha-Socco s

Larmenta

Pomaccoria

Parcacancha

Junín

Huancavelica

MAIN CHANGES TO THE SEVENTH VERSION OF THE CONCESSION AGREMENT

New scheme for the payment of mandatory investments

Ownership regimen

User transportation during construction

Modification of rpmo due to demand

Service level evaluation

T1

11 34 53 78

T2

102 128

Tranche

PK

∑

9

Budget Share Easy access Difficult access due to

narrow roads

Difficult access due to narrow roads

Difficult access due to narrow roads

Difficult access due to narrow roads

Easy access

Train

Cross-Section

Plataform

S&S Railway Superstructure and Systems s

Slope Protection, Embankments, Drainage, and Platform 18.5 %

39.9 %

20.5 %

US$ 37.2

US$ 70.1 US$ 36.7

US$ 12.3

US$ 30.0 US$ 25.0

Rolling Stock 2 DMUs, 1 locomotives, 3 passenger cars, and 5 freight cars 2 DMUs and 1 Locomotive

FISs - Tranche 1, Tranche 2, MR RIS, EIA US$ 8.1 3.0 %

Stations (7) , Stops (20) Chilca Yard and Shop (1) Bridges (15) and Tunnels (38)

US$ 17.7

18.1 %

US$ 8.1

US$ 48.4

US$ 49.5

US$ 106.8

US$ 55.0

E PT

US$ 267.8 Total Budget (inc. VAT) US$ Note: Amounts are expressed in milllions of US dollars.

US$ 30.7

BUDGET SHARE OF THE INTERVENTIONS

T1

11 34 53 78

T2

102 128

Tranche

PK

BUDGET SHARE OF THE INTERVENTIONS

10

Easy access Difficult access due to narrow roads

Difficult access due to narrow roads

Difficult access due to narrow roads

Difficult access due to narrow roads

Easy access

Train

1

1

1

2

--

--

--

--

4

3

--

1

1

2

6

--

2

1

4

2

--

1

4

4

12

--

2

8

4

15

1

7

15

20

38

E Stations

Bridges

PT Yard and Shop

Stops

Tunnels

Cross-section

5.8 %

1.5 %

4.0 %

6.8 %

US$ 15.5

US$ 2.6 US$ 1.3

0.0 % US$ 0.06 US$ 0.04

US$ 2.7 US$ 8.0

US$ 9.8 US$ 8.4

∑ Budget Share

US$ 15.5

US$ 3.9

US$ 0.1

US$ 10.7

US$ 18.2

US$ 48.4 Budget - Specific Works (inc. VAT) US$

Note: Amounts are expressed in milllions of US dollars.

18.1 %

DETAIL – SPECIFIC WORKS

T1

11 34 53 78

T2

102 128

Tranche

PK

BUDGET SHARE OF THE INTERVENTIONS

11

Easy access Difficult access due to narrow roads

Difficult access due to narrow roads

Difficult access due to narrow roads

Difficult access due to narrow roads

Easy access

Train

1 -- -- -- -- -- 1

Superstructure

PCO

Signage

Telecommunications

Cross-section

0.4 %

26.9 %

1.3 %

US$ 1.0

US$ 44.2 US$ 27.9

11.3 % US$ 22.8 US$ 7.5

US$ 2.0 US$ 1.4

∑ Budget Share

US$ 1.0

US$ 72.1

US$ 30.3

US$ 3.4

US$ 106.8 S&S Budget (inc. VAT) US$

Note: Amounts are expressed in milllions of US dollars.

39.9 %

DETAIL – RAILWAY SUPERSTRUCTURE AND SYSTEMS

Execution of Agreement Financial Close 7 11 6 8 4

Conditions for issuing of CAOs:

1. FIS & Environmental Certification Milestone: After approval of Financial Close. 2. Rolling Stock Purchase Order Milestone: After approval of financial close and approval of

FIS (max. 30% of the RS budget). 3. T1 Platform 1 Milestone:, according to Concessionaire’s offer. First block of continuous

and complete platform 4. T1 Platform 2 Milestone: Second block of continuous and complete platform, according

to Concessionaire’s offer. 5. Hito de Plataforma 3: Third block of continuous and complete platform, according to

Concessionaire’s offer. 6. T1 Superstructure and Signage (S&S) 1 Milestone: First block of S&S, according to

Concessionaire’s offer. May include supply. Complete Works for T1 may be added. 7. T1 Superstructure and Signage (S&S) 2 Milestone: Second block of S&S, according to

Concessionaire’s offer. May include supply. Complete Works for T1 may be added. 8. T1 Superstructure and Signage (S&S) 3 Milestone: Third block of S&S, according to

Concessionaire’s offer. May include supply. Complete Works for T1 may be added. 9. T1 Superstructure and Signage (S&S) 4 Milestone: Fourth block of S&S, according to

Concessionaire’s offer. May include supply. Complete Works for T1 may be added. 10.T1 RS Provision Milestone: Upon approval of the commissioning tests.

Same conditions for the payment of the investments and issuing of the CAOs for Milestones 3, 6 through 10 shall apply for Milestones 11 to 16 for T2.

PAYMENT OF MANDATORY INVESTMENTS

Every time the Concessionaire requests the payment of the S&S investments, it shall increase the amount of the Letter of Guarantee for the same amount to be paid.

1

RPI MR 10 years

RPMO 25 years

RPI WORKS 15 years

Letter of guarantee during construction of T2

OC 2 15 T2

Letter of guarantee during construction of T1

FIS

9 T1

Complete Works T1

Plataform T1

S&S T1

Complete Works T2

Plataform T2

Divided into 3 continuous and complete blocks

1 single complete block

Divided into 4 blocks

3 4 5

6 7 8 10

11

12 13 14 16

Divided into 4 blocks

PT E E

S&S T2

12

13

OWNERSHIP REGIMEN

14

OWNERSHIP REGIMEN

OPERATION IN THE TRANSITION STAGE TRANSPORT OF USERS DURING CONSTRUCTION (CLAUSE 7.27)

TRANCHE 1* TRANCHE 2

Chilca Sta. Mariscal Cáceres Sta. Huancavelica Sta.

DURING PREPARATION OF STUDIES

DURING CAPEX IMPLEMENTATION FOR TRANCHE 1, UP UNTIL ACCEPTANCE

DURING CAPEX IMPLEMENTATION FOR TRANCHE 2

RESPONSIBILITY FOR OPERATION AND MAINTENANCE (O&M) OF FHH DURING TRANSITION STAGE

O&M BY GRANTOR

O&M BY GRANTOR

O&M BY CONCESSIONAIRE

Transportation by Concessionaire

Transportation by Concessionaire

15

PK

1+3

00

PK

76+

760

PK

128

+200

Execution of Agreement

Taking of Possession of

Tranche 1

Acceptance of Tranche1

Start of Comprehensiv

e Stage Partial RPMO for Operation of Tranche 1 RPI MR

10 years

RPMO 25 years

RPI WORKS 15 years

16

SERVICE LEVEL EVALUATION

ANNEX 7: SERVICE LEVELS

Clause 7.2.5.2.

(…)

Evaluations and Penalties

The evaluation and calculation of penalties associated with said Service Levels shall be performed gradually,

as follows:

Evaluation in the Transition Stage

INDEX EVALUATION

First Half-Year (from month 0 to month 6 inclusive)

Second Half-Year (from month 7 to month 12 inclusive)

Starting with Third Half-Year (from month 13 on)

Service Availability (D) 70% 85% 100%

Service Regularity (R) 0% 50% 100%

System Quality (CS) 100% 100% 100%

Fraud Prevention (F) 100% 100% 100%

POTENTIAL OF THE FHH TOURISM POTENTIAL IN THE AREA OF DIRECT INFLUENCE

• MOUNT HUAYTAPALLANA (1h 40 min by main road from Huancayo)

• TORRE TORRE GEOLOGICAL FORMATIONS (14 min)

• HUANCAYO CATHEDRAL (8 MIN)

• HUAMANMARCA SQUARE (4 MIN)

• LA CONSTITUCIÓN SQUARE (8 MIN)

• CHAPEL OF LA MERCED (8 MIN)

• CHAPEL OF CERRITO DE LA LIBERTAD (9 MIN)

CHILCA RAILWAY STATION

WARIVILCA SANCTUARY AND SITE MUSEUM (Huancan) (15 min by road) LLOCLLAPAMPA

PUYAS FOREST (Palca)

ÑAHUINPUQUIO INCA TRAIL

INKA MACHAY ARCHAEOLOGICAL SITE

CHURCH OF HUANDO

COLONIAL BRIDGE AND CHURCH IN IZCUCHACA (5 min on foot from station)

CAVES OF HUARICHACA (2h 22 min - 88.4 km from Izcuchaca Station by road)

TOWN OF VIQUES (next to Viques stop)

MAIN SQUARE OF HUAYUCACHI (next to stop)

OCOPILLA FOREST (10 min – 2.8 km)

CHURCH OF CUENCA (next to stop)

AGUAS CALIENTES HOT SPRINGS (next to stop)

RANRAPATA CCACCASIRI ARCHAEOLOGICAL SITE

UCHKUS INKAÑAN ARCHAEOLOGICAL COMPLEX (10.4 km from Yauli Station)

• LAKE PULTOCC (1h 5 m – 60.7 km)

• LAKE ARANTASU (43 min – 33.6 km)

Fuente: MINCETUR

Natural Sites

Cultural Expressions

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HERNÁN CASTAÑEDA CAMACHO Project Director t. (51-1) 200-1200 annexed 1222 e. hcastaneda@proinversion.gob.pe | fhh@proinversion.gob.pe