MegaProject 1309: Tender opens for US$4.4 billion Bogotá metro PPP
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As promised by the Mayor of Bogotá less than two weeks ago, the Bogotá Metro Company (EMB) has announced the opening of the tender to design, partially finance, construct, operate and maintain the first line of the city's metro system. The total cost of the PPP project is US$4.4 billion.
The 24km metro line will run on raised track to avoid earthquake risks through the so-called Caracas Corridor located in the south-west of the city, where public transport demand is highest. 23 trains, each able to carry 1,800 passengers, will stop at 15 stations along the route and transport roughly 72,000 passengers per hour.
Following a Request for Expressions of Interest (RFEOI) earlier this year, to which 64 companies and consortia responded, interested private parties are now invited to prequalify to submit proposals for the project until the end of 2018. EMB has not disclosed when it plans to receive proposals, but has scheduled 6 September 2019 as the date of commercial close.
The "partial" financing obligations of the concessionaire are due to a significant portion of the total cost being provided by development finance institutions. As reported on this platform, last week the Inter-American Development Bank (IDB) approved a US$600 million conditional credit line for the project.
Since then, both the World Bank and the European Investment Bank (EIB) have announced that they are also providing financing, with all three DFIs signing loan agreements this week.
The World Bank, through the International Bank for Reconstruction and Development (IBRD) and in parallel with the IDB, is supporting the project with a US$600 million credit line with a US$70 million first instalment, which will fund initial construction works of the viaduct, audits and technical studies for this project.
The EIB, in its first public sector project financing in Colombia, is providing a US$480 million loan, with an initial tranche of US$56 million. These primary loans are planned to cover the development of the project between 2019 and 2020, after which all three banks will disburse further installments to cover the rest of the construction, which is expected to take place until the year 2024.
Of the total investment of US$4.4 billion, US$1.1 billion must be provided by the private partner. This will be recovered during operations stage of the project, which is expected to be 20 years in length.
For more information about the prequalification, see the Business Opportunity.