Sao Paulo metro line 6 PPP halted due to funding shortfall

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Sao Paulo metro line 6 PPP halted due to funding shortfall

Move São Paulo, the concessionaire of Sao Paulo's metro Line 6 - Orange, is awaiting expropriation funds from the state government to begin the development of the project.

According to sources, about 30% of the state government funding has not been released, so that less than 40% of the expropriations have been made. The expropriations were scheduled to be completed on 19 May 2015.

Move São Paulo, composed of OdebrechtQueiroz GalvãoUTC Participações and Eco Realty Fundo de Investimentos,  was the only bidder for the project. It was selected as the preferred bidder in early November 2013. Later, in August 2014,  Mitsubishi Heavy Industries and Mitsui & Co were awarded a turnkey contract for construction of the project.

The first phase of the project, also known as the Orange Line, would run for 15·9 km between Brasilândia and São Joaquim, with 15 stations. It will also have 17 ventilation points and one train yard. Expected ridership is 633 000 passengers/day. The new line will connect to four other metro lines: Nº 7 and Nº8 at the Água Branca station, Nº 4 at the Higienópolis/Mackenzie station, and Nº1 at the São Joaquim station.

The concession contract involves the construction, operation and maintenance of the new metro line until April 2039. Specifically, the object of the PPP for Line 6 involves:

  • Necessary expropriations and resettlements
  • Design 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 total investment of the project is estimated at Rs8.9 billion (US$2.56 billion). 

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