Parana to cancel road PPP contract

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Parana to cancel road PPP contract

The state of Paraná in Brazil has intentions to terminate the public-private partnership (PPP) involving the Corridor PR-323 project.

The concessionaire, formed by Odebrecht Transport SA, Tucumann Engenharia e Empreendimentos Ltda., Goetze Lobato Engenharia Ltda. and America Empreendimentos Ltda. failed to fulfill the concession contract. The biggest challenge faced by the concessionaire was to obtain funding for the project. Odebrecht's involvement in corruption investigations has also influenced the decision of the state.

As we reported in June 2014, the project was awarded to the Odebrecht-led consortium. The state of Paraná in Brazil launched the PPP tender process to widen, restore, maintain and operate state highway PR-323 (and adjacent roads PRC-487 and PRC-272) in January 2014. The preferred bidder was the only bidder for the project.

The project has an estimated investment of BRL$3.6 billion (US$1.52 billion) during the 30 years of the concession contract. Adding maintenance and operations costs, the investment amounts to BRL7.7 billion (US$3.5 billion). Land acquisition is included in the contract.

The 30-year concession involves duplication of 207km of highway. 162.5 Km will be widened during the first stage of the investment program and 44.3 km during the second stage.

The tollbooth fee was capped at R$4.20 and when traffic reaches a maximum amount set in the tender documents, the additional revenues derived from this additional traffic will be shared with the state of Paraná.

The project envisages the construction of 19 overpasses, 22 underpasses, 13 pedestrian walkways and nine bridges.

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