Sao Paulo’s ARTESP launches road P3

Sao Paulo’s ARTESP launches road P3

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ARTESP, the Regulatory Agency for Transport Public Services of the State of São Paulo, has launched a tender process to seek a private partner to develop a road project under its Concession Program.

The Rodoanel Mário Covas (Mario Covas Ring-road) is a road around the city of São Paulo. The 43.86 kilometre-long northern section will complete the 177 kilometres of this ring road. It is used by 65,000 vehicles per day, including 30,000 trucks and provides access to Porto de Santos, Brazil's main seaport. The northern section also includes the new access to the Guarulhos International Airport.

The total project cost is expected to amount to BRL581.5 million (US$184 million). The minimum bid to participate in the tender process is BRL462 million (US$146 million).

The project will be awarded in January 2018.

São Paulo State Government seeks to work with large operators and sponsors worldwide. To do so, the State Government also aims to innovate in the development of its Programme. For example, all documents will be translated into English, and concession contracts will be reviewed every four years, which will facilitate new investments and development of concessions.

The contract foresees provision of services and security for citizens, including: WiFi for accessing information and services from the concessionaire, doctors, ambulances, and mechanics, in addition to CCTV (closed-circuit television) to improve security, weigh-in-motion devices for trucks and bicycle lanes in urban areas. All services will be free of charge and available 24 hours a day, 7 days a week, and the quality will be constantly monitored to ensure excellent service to the population.

The IFC is the financial advisor behind the program’s new concession model. This approach includes a clause whereby the institution financing the project gives the financer the right to step in and operate a special purpose vehicle (SPV) if the concessionaire fails to comply with the contract. After a period operating the concession, the financier would also have the right to sell the SPV.

In November 2016, the IFC has provided a letter of credit that could potentially finance up to 30% of four new highway concessions, including the Rodoanel Mário Covas highway.

This is the third tender process launched under the 4th Stage of the São Paulo Road Concession Program, aiming to provide better roads to users and to promote greater economic development in the region. Since its creation nearly two decades ago, the programme has been responsible for the creation of 19 roads.

This stage includes approximately 1,730 km of roads on which millions of passenger vehicles travel on weekly basis, in addition to cargo trucks that transport merchandise to the main transshipment points, such as the Port of Santos, São Paulo International Airport (Guarulhos), and to consumer and industry hubs in the South, Northeast and Midwest regions of Brazil, as well as the main regional centers within São Paulo State.

The other roads including in the programme are: São Paulo Mid-West Roads (Florínea-Igarapava); Rodovias dos Calçados road (Itaporanga-Franca) and São Paulo Coast Roads (Miracatu-Ubatuba).

As we reported in April, Artesp awards the Rodovias dos Calçados road PPP to Arteris, Abertis’ subsidiary in Brazil. Arteris presented a bid of BRL1.23 billion (US$382 million) beating out from competition companies as Ecorodovias​

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