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HUANCAYO HUANCAVELICA RAILWAY NEW CO-FINANCING SCHEME INCORPORATING AVAILABILITY PAYMENT February 2020
HUANCAYO HUANCAVELICA RAILWAY
NEW CO-FINANCING SCHEME INCORPORATING AVAILABILITY PAYMENT
February 2020
GENERAL ASPECTS
1 Design, financing, construction - upgrading, acquisition of rolling stock, operation and maintenance and transfer to the grantor at the end of the concession period.2 Remuneration for investment in works and rolling stock.3 Compensation for Availability (returns on investments financed by equity).4 Compensation for maintenance and operation.5 Subject to the final deadlines required by the competent entities (MTC, Ositran and MEF) and by the General Comptroller Office, for the issuance of opinion and report
to the final version of the contract.
MODALITY
CO-FINANCED
STATE INITIATIVE
SELECTION
MECHANISM
COMPREHENSIVE
PROJECT BID1
COMPETITION
FACTOR
LOWEST ECONOMIC
PROPOSAL
(RPI-Works, RPI-MR2,
RPD3 and RPMO4)
INVESTMENT
USD 233 Million
without VAT, in real terms
CONCESSION
TERM
30 YEARS
AWARD
JULY 20205
1. Population served
exclusively by FHH
1. The average HDI of the population served
exclusively by the HHR is 0.20 (extreme
poverty zone).
2. Average investment ratio per population
adjusted by HDI
1. FHH: USD 1.9 thousand
2. Line2: USD 2.6 thousand
3. USD 1 dollar invested in the population
served exclusively by the FHH would
generate an impact of 5 times the investment
made; this is because they are in areas of
poverty with low Human Development
Indexes.
4. The FHH would make it possible to connect
and integrate these populations with the
cities, avoiding isolation and allowing access
to health, education, work, trade and tourism
services.
2. Economic and social impact of
investment in FHH
3. Conclusions
ECONOMIC AND SOCIAL IMPACT ON THE POPULATION SERVED BY THE PROJECT
Source: INEI 2012PNUD
ONE-STOP SHOP BY RAIL MODE
DEPARTAMENT / DISTRICT POBLACIÓN HDI
JUNIN 8,057 0,26
VIQUES 2,065 0,27
HUACRAPUQUIO 1,415 0,27
CULLHUAS 2,583 0,19
COLCA 1,994 0,32
HUANCAVELICA 67,575 0,19
ACOSTAMBO 4,537 0,28
PILCHACA 626 0,28
CUENCA 2,226 0,14
MARISCAL CACERES 760 0,24
ACORIA 31,299 0,20
YAULI 28,127 0,17
Total 75,632 0,20
Description Unit Amount
Total investment USD Million 233
Railway kilometers Km 128
Ratio USD/Km 1.8
Population served HDI #persons km
Exclusively by HHR 0,20 75,632 109
By HHR and road 0,53 210,320 19
Total 0,25 285.952 128
Investment per inhabitant
USD MillionUSD/pers.
Without HDI HDI Adjust
Exclusively by HHR 198 2,618 13,090
By HHR and road 35 166 313
Total 233 815 1,853
TECHNICAL INTERVENTIONS OF THE PROJECT
DESIGN FEATURES
• Maximum axle load: 20 tons
• Maximum design speed: Track 3 class*
INTERVENTIONS
• Replacement of the existing rails on the main road and wood sleepers
• Replacement of existing bridges with new structures designed for a
Cooper E-80 load system.
• Protection and stabilization of slopes and riverine flood defences and
extension of tunnel gauges.
• Replacement of trackside signalling equipment and operation control
centre.
• Use of existing ballast (as sub-ballast, after cleaning and screening)
and installation of new ballast.
• Construction of the longitudinal drainage system (ditches) and
improvement of the transversal drainage system, along the track.
• Remodeling of the Chilca Workshop Yard facilities.
• Construction of exhibition areas for the Historical Assets.
* According to National Railway Regulations, in Track 3 Class, the maximum permissible speed by sections or stretches is: 64 km/h for freight trains and 96 km/h for passenger trains.
RENOVATION OF THE EXISTING TRACK
Rehabilitation and conditioning of the 7
stations.
1.- Chilca (PK 1+300)
2.- Manuel Tellería (PK 44+300)
3.- Izcuchaca (PK 67+600)
4.- Mariscal Cáceres (PK 76+760)
5.- Acoria (PK 94+700)
6.- Yauli (PK 112+470)
7.- Huancavelica (PK 128+200)
Rehabilitation and conditioning of 19
stops, and reconstruction of the Ccocha
Stop
RECONDITIONING OF STATIONS AND STOPS
TYPE UNITS
Vehicle DMU (*) 4
Locomotives 2
Passenger cars 3
Merchandise warehouses 5
Supply of new rolling stock, which must be in accordance with the characteristics of the track, such as: operating
altitude, radii, gradients and tunnel gauges.
The following table presents the minimum requirement of the Project:
(*) 4 car diesel multiple unit or multiple unit of diesel
When the demand exceeds 1 050 000 pax/year, an
additional investment will be made for the fifth DMU, the
way of payment of the respective DMU will be
determined by agreement between the parties.
ACQUISITION OF ROLLING STOCK
Co-financing = RPI_Works + RPI_MR + RPD + RPMOf – Collection
RPMOf = RPMOi x [(1-%)-ΣFDT)-DET
RPMOf : Net value of the final annual RPMO
RPMOi : Updated RPMO value
ΣFDT: Sum of Quarterly Deduction Factors
(Comprehensive Stage)
DET: Accumulated quarterly deductions during the
Transition Phase, as set out in the Service Levels in
annex 7% of the RPMO will be reserved for major
maintenance.
CO-FINANCING RECOGNIZED IN THE COMPREHENSIVE STAGE
The Collection, from the beginning of the Exploitation
corresponds to:
Charge for Mandatory Services.
Railroad Access Charge.
Rolling Stock Rental Rates.
The Revenue from Complementary Services that
correspond to the GRANTOR.
Agreed Penalties.
TOURISTIC POTENTIAL OF THE DIRECT AREA OF INFLUENCE
POTENTIALITIES AT THE FHH
Chilca Railway
Station
Huayucachi Main Plaza
(on foot from
whereabouts)
Pk 1+300
Ranrapata Ccaccasiri
Archaeological Site
Ñahuinpuquio Inca
Trails
Inka Machay
Archaeological Site
Cuenca Church (on
foot from whereabouts)
Warivilca Sanctuary and Site Museum (Huancan) (15 minutes by road)
Puyas Llocllapampa
Forest (Palca)
Church of Huando
✓ Huaytapallana Mountain
(1h 40 min by the main road to Huancayo)
✓ Geological Formations of Torre Torre (14 min)
✓ Pultocc Lake
(1h 5 m – 60,7 km)
✓ Arantasu Lake
(43 min – 33,6 km)
Uchkus Inkañan
Archaeological Complex
(10,4 km from Yauli Station)
Cultural events
Natural sites
Source: MINCETUR
Thermal baths of Aguas
Calientes(on foot from whereabouts)Town of Viques
(on foot from Viques'
whereabouts)
✓ Huancayo Cathedral (8 min)
✓ Plaza Huamanmarca (4 min)
✓ Plaza La Constitución (8 min)
✓ La Merced Chapel (8 min)
✓ Cerrito de la Libertad Chapel (9 min)
Caves of Huarichaca
(2h 22 min - 88.4 km
from Izcuchaca Station
by road)
Ocopilla Forest (10 min – 2,8 km)
Colonial Bridge and Church of
Izcuchaca (5 min. on foot from station)
IMPLEMENTATION OF THE PROJECT
Concessionaire O&M
COMPREHENSIVE STAGE (Operation) (BMR and DPO - 25
years, subject to deductions for non-compliance with service levels) PRE-OPERATIONAL PHASE
0 16 20 38 39 58 59 61
INVESTMENT PERIOD
Financial
Closure
EDI approval
40
STRETCH 1
Acceptance T1 Start-up T1
STRETCH 2
Acceptance T2 Start-up T2
10
RPI MR_T1 - 10 years
RPI OBRAS_T1 - 15 years
RPI MR_T2 - 10 years
RPI OBRAS_T2 -15 years
Availability
of the assets
The Grantor must prove that it is
in possession of the Concession
Assets (land)
Mo
nth
s
MR for Start-up T1
2 DMU
1 Locomotives
3 Passenger cars
5 Merchandise
warehouses
MR for Start-up T2
2 DMU
1 Locomotives
NEW CO-FINANCING SCHEME
Improving the Bankability of the ProjectRISK LIMITED TO THE CONCESSIONAIRE (RPI for debt service coverage):
DEBT
SERVICE
RETURN
OF
CAPITAL
RPI (DEBT
SERVICE)
RPD
• No Deductible
• Irrevocable
• Unconditional
• Fixed payment
date (10 - 15
years)
RPI (DEBT
SERVICE)RPD RPMO
PPD ( RPD + RPMO)
• Deductible
• Payment date at the beginning
of POC until the end of the
Concession
100% RPI
co-financed
schemes (irrevocable,
unconditional, non-
deductible with a fixed
payment date)
NEW FHH SCHEME
NEW COFINANCED SCHEME
HUANCAYO
HUANCAVELICA
RAILWAY
Sponsors as
financiers assume
availability risk
Irrevocable
payment with a
fixed date without
deductions
100%
0%
50%
Service Level
Availability
Frequency
Railway
System Quality
User
Satisfaction
Fraud
Prevention
Balance between availability and bankability
PPD = RPD + RPMO
(services levels)
30%
20%
20%
10%
20%
RPI
(Bankability)
PRE-OPERATIONAL PHASE O&M
FROM SIGNING THE CONTRACT TO THE
TAKEOVER: STATE-RUN RISK
3
GEOLOGICAL EVENT RAILWAY EMERGENCY
2
Closing Date
Takeover
GEOLOGICAL EVENT RAILWAY EMERGENCY DUE TO COLLAPSE AND/OR HUAYCOS
CO
PE
• Presence of phreatic level higher than those identified
• Existence of undetected artificial or anthropogenic cavities
• Presence of unidentified active tectonic faults
• Undetected shear slope slippage
• Fall of blocks, debris or huaycos, platform sinking,
extraordinary rise in the water level in the riverbed
• Others
• Collapse and/or Huayco
RIS
K A
SS
IGN
ME
NT
GRANTOR:
• Unconstructed sub-stretch (not intervened) volumes over 50
cubic meters (m3).
• Sub-stretch built (intervened) volumes higher than 200 cubic
meters (m3).
CONCESSIONAIRE:
• Lower volumes will be assumed by the Concessionaire.
GRANTOR:
• Areas without intervention with a volume greater than 50 cubic
meters (m3)
• Areas with interventions with a volume greater than 200 cubic
meters (m3)
CONCESSIONAIRE:
• Lower volumes will be assumed by the Concessionaire.
SHARED RISK SHARED RISK
Geological Events
THE GRANTOR
shall maintain the
passability of the
railway track and
stability of the
slopes and platform
until the takeover
KEY ASPECTS OF THE CONTRACT
1
KEY ASPECTS OF THE CONTRACT
RPMO Reserve Account
CONSTRUCTION
PERIOD
OPERATION AND MAINTENANCE PERIOD
Major maintenance
and replacements
Capex
Gross RPMO
RPMO net
Reserve
account
provision
GRANTOR
CAUSE
CONCESSIONAI
RECAUSE
PRE-OPERATIONAL PERIOD
- Studies (EDI, EIA- Sd)
- Costs and expenses of contractual guarantees
- Insurance Costs
- Financing Costs
- Intangibles and RPI CAOs obtained
- Valuation of incomplete milestones
- Reflective guarantee to the Concessionaire
- Return of net letters of guarantee of applicable
penalties
- Studies (EDI, EIA- Sd)
- Costs and expenses of contractual
guarantees
- Insurance Costs
- Financing Costs
- Intangibles and RPI CAO obtained
- Valuation of incomplete milestones
- Execution of letters of guarantee and
penalties
- Irrevocable RPI
- Amortized budget for works financed by own
capital (without % construction profit margin)
- Net RPD and RPMO in proportion to the period
of applicable penalties
- Execution of letters of guarantee
Anti-corruption clause
applicable to all scenarios
KEY ASPECTS OF THE CONTRACT
E X P I R Y
OPERATION AND MAINTENANCE PERIOD
- Irrevocable RPI
- Financial assets by RPD
- Net RPD and RPMO in proportion to the period
of applicable penalties
- Reflective guarantee to the Concessionaire
- Return of net letters of guarantee of applicable
penalties
In the event that there is a refusal of the acquisition process, the MTC has an additional period of five (05) months for the completion of the
acquisition activities, that is, until April 2021, two (02) months before the approval of the EDI. For this purpose, there is already an Emergency
Decree No. 018-2019, which establishes extraordinary measures for the promotion and implementation of the projects prioritized in the National
Infrastructure Plan for Competitiveness.
COMMITMENTS TO PURCHASE PLOTS:
74%26%
KEY ASPECTS OF THE CONTRACT
IMPROVING THE BANKABILITY OF THE PROJECT
CROWNING
DITCHES
GROUP
OWNERS GOAL
1ST GROUP:
25 PLOTS
Peasant Communities: Viquez, San Francisco de
Tellería de Atahualpa, Ñahuinpuquio and Acostambo
12.31.2019
(Compliance with
this goal has been
confirmed)
2DO GROUP:
24 PLOTS
Peasant Communities: Larmenta, Huando, Antaymisa,
Parccacancha and Pumacoria and particular
03.31.2020
3ER GROUP:
40 PLOTS
Peasant Communities Paccha, San Juan de León,
Cuenca, Unión Paraiso, Pucuto Ccactcco Maritama,
Motoy, Troya, Ambato, Pumacoria, Acoria and
particular
11.27.2020
1
• Investments paid for by RPI generate
the issuance of Work Progress
Certificates (CAO).
• 60 RPI_CAO_Works and 40
RPI_CAO_MR will be issued for each
section.
• In the recognition of the S&S (requires
an Additional Guarantee) each of the
elements that make up the complete
Works may be added. The Complete
Works do not require an Additional
Guarantee to be recognized.
• Investments paid for by RPDs do not
generate the issue of CAO.
STRETCH 2
Commissioning T1
Mo
nth
s
0
Platform up to 3 continuous and complete
blocks (RPD)
3 4 5
Complete works
P
TE
S&S hasta en 4 bloques
(RPI_OBRAS_T1)
6 7 8 9
10
Showroom (RPD)
Acceptance T1
Preparation and Approval of EDIsFinancial
Closure STRETCH 1
MR (RPI_MR_T1)
11
Complete works
E
S&S in up to 4 blocks (RPI_OBRAS_T2)
Platform in 1 single block (RPI_WORKS_T2)
12
13 14 15 16
MR (RPI_MR_T2)
17
Each time the Concessionaire requires
recognition of investments in OC MR and S&S
shall issue an additional Guarantee and increase
it by the same amount to be recognized, in the
case of S&S.
PERFORMANCE BONDRolling Stock Purchase Order (PO) Guarantee
S&S Guarantee S&S Guarantee
Milestones
OC MR
(RPI_MR_T1)
2
EDI
(RPD)
1
FLEXIBILITY FOR THE RECOGNITION OF CONSTRUCTION MILESTONES:2
KEY ASPECTS OF THE CONTRACT
IMPROVING THE BANKABILITY OF THE PROJECT
16 20 21 38 39 40 41 58 59 60 61
Acceptance T2 Commissioning T2
Improving the Bankability of the Project
Evidence of Financial Closure after the fulfillment of plot availability requirements.
Takeover after Financial Closure.
Audited financial model for approval of the Financial Closure.
Statement of credit line availability for project financing
Additional guarantees for milestones with general project functionality components
Track passability.
Possibility of parallel construction of stretches prior approval of the Grantor.
KEY ASPECTS OF THE CONTRACT
KEY ASPECTS OF THE CONTRACT
Reckless proposals
CONCEPTS PAYMENTS KPI
MAXIMUM
DISCOUNTS
RPI Cost of financing
RPD Return to the Investor
RPMO Operator's margin
20
Address: Av. Enrique Canaval Moreyra Nº 150
Piso 8 San Isidro – Lima, Perú
Phone: (511)200-1200 Ext 1245
E-mail: [email protected]
www.proinversion.gob.pe
Gustavo Ibargüen Chávarri
Project Portfolio Director
Phone: (51-1) 200-1200 Ext. 1277
E-mail: [email protected]
Hernán Castañeda Camacho
Project Manager
Phone: (51-1) 200-1200 Ext. 1222
E-mail: [email protected]
