News / MegaProject 26: Sao Paulo re-issues tender for $3.8 billion metro line 6 PPP project

MegaProject 26: Sao Paulo re-issues tender for $3.8 billion metro line 6 PPP project

🕔 May 1, 2013
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The Government of Sao Paulo has re-issued the tender documents for a PPP contract to design, build and operate Sao Paulo's metro line 6. The tender was originally launched on February 8 with a deadline of May 9 but bidders reported problems with the land acquisition costs included in the tender documents.

The new tender was launched on April 29th and the new deadline is July 30th, 2013. Bidder will have 90 days to submit their bids.

In the new version of the tender documents, the private partner will only bear the land acquisition cost estimated by the Government plus a 10 % more of the mentioned cost. If the costs go beyond +10%, the state will bear the difference.

The object of the Public-Private Partnership for Line 6 involves:
  • Necessary expropriations and resettlements
  • Production of research and projects
  • Obtaining of environmental licences for installation and operation
  • Engineering works (tunnels, stations and yards)
  • Acquisition of systems, equipment and rolling stock
  • Operation and maintenance of Line 6 during the concession period
  • Concession period: total 25 year contract, 6 years for implantation / deployment & 19 for O&M
The firm that offers the lowest payment price taking into account the government's maximum limit value of R$ 580 million (US$280 million), will become the winner of the bidding.Regardign the financial structure of the project:
  • The estimated demand was defined by a Study carried out by Metrô with the endorsement of the World Bank. For the first year of operation it is estimated 630 thousand/passengers/day.
  • Estimated operating cost: estimated on the basis of São Paulo's Metrô market wage validated by the World Bank. Estimation shall be as set out in the financial model, and R$ 184,3 million (US$91 million) annually in steady state.
  • Estimated investments of R$ 7,8 billion (US$3.8 billion): Public investment (50% of the total) with submission of guarantees by the grantor, with probable financing of BNDES to Paulista's Treasure up to R$ 2,0 billion.
More information: STM

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