Lima metro line 2 to cost staggering US$5.3bn

Total cost for Peru’s Lima metro line 2 project is set to top US$5.37bn, according to a preinvestment study produced by a consortium led by Italian engineering firm Geodata.

Investments in infrastructure and rolling stock along the best route identified by the consortium have been estimated at US$2.9bn and US$871mn, respectively, while the remaining US$1.57bn would cover construction, expropriation and other risks.

Such figures largely outweigh total costs budgeted for ongoing metro developments in Santiago, where line 3 and line 6 will cost combined US$2.75bn, in Quito where total costs are US$1.4bn and in Panama City where costs add up to US$1.45bn.

The chosen route stretches underground east to west for 27km, beginning in the Ate municipality and ending at Callao port with 27 stations along the way, such as, among others, Javier Prado avenue, the Santa Anita market, the Ovalo de Santa Anita area, Vía de Evitamiento street, 28 de Julio avenue, the national stadium and the San José hospital in Callao.

An additional 8km stretch, considered to be the first milestone in the development of metro line 4, will connect Callao port with international airport Jorge Chávez.

Peak demand in rush hour is set to reach 22,300 passengers per hour, while as many as 644,000 citizens could be transported every day, the study estimates.

For the project’s financial concerns, a cofinanced public-private partnership (PPP) emerged as the preferable option.

“The project is not profitable, meaning that average tariffs cannot cover the investments and operational costs, which makes necessary the state involvement in the investment process,” the study reads.

“Therefore, we suggest the project be carried out through a PPP, with a concession being the most appropriate option.”

Multilateral institutions such as the World Bank’s International Bank for Reconstruction and Development, BIRF, German development bank KfW, the Japan International Cooperation Agency JICA and the Latin development bank CAF, which has already pledged its participation, are indicated as potential sources for financing.

The study expects a concession contract to be awarded in March 2014, with an execution period of 66 months.


Source : bnamericas

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