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Peruvian government has canceled a US$525 million contract with a Peruvian-Argentine consortium to build El Chinchero International Airport near the city of Cusco because of financing concerns.

As we reported in April 2014, ProInversion awarded the project to the Kuntur Wasi consortium, formed by Peru's Andino Investment Holding and Argentina's Corporacion America.

The Kuntur Wasi consortium,  with a bid of US$264.7 million, beat out from competition the other two teams that submitted bids for the project:

• Aeroportuario Imperial consortium formed by Colombia's Grupo Odinsa and Mota Engil Perú; and

• Aeropuerto Chinchero consortium formed by France's Vinci Airport, Vinci Concessions and Peru's Graña y Montero.

The concession contract included the design, construction, financing, operation and maintenance of the new International Airport. The concession contract will have a period of 40 years.

Kuntur Wasi was going to invest 53% of the total investment in the project (US$278 million). The new facility was planned to have a 4km long and 45m wide runway; a 4km long taxiway, and an apron able to fit 18 aircrafts. The passenger terminal was designed to initially handle 4.5mn passengers.

The airport would replace the existing Alejandro Velasco Astete air terminal, which serves tourists visiting the the city of Cuzco and the nearby Inca citadel of Machu Picchu and is Peru's second-busiest.

In 2010, that same consortium won concessions for airports in six southern Peruvian regions: Apurimac, Ayacucho, Puno, Madre de Dios, Arequipa and Tacna.