Private Participation in Infrastructure April 2007 Gerencia de Participación Privada en Infraestructura
Contents TRANSPORT Roads Ruta del Sol Road Concession Urban Transport Bus Rapid Transport System (BRT) - Cali Bus Rapid Transport System (BRT) - Barranquilla Bus Rapid Transport System (BRT) - Cartagena Bus Rapid Transport System (BRT) Bucaramanga Public Transport Strategic Systems Air Transport Railways MINES AND ENERGY TELECOMMUNICATIONS Integration and Concession of Medellín, Rionegro, Montería, Quibdó and Carepa Airports Railways Concessions: Faca - Belencito Sale of the Nation s Shareholding in Five Electric Utility Companies Ecopetrol Shares Public Offering Sale of the Nation s Shareholding in Gecelca (Generadora y Comercializadora de Energía del Caribe) and Urrá Isagen Shares Public Offering Investment Alternatives in Mining Attraction of a Strategic Operator to Provide the National Postal Services Compartel - Program of Social Telecommunications 3
RUTA DEL SOL ROAD CONCESSION Sector Sub-sector Objective Transport. Roads. Structure through a Concession scheme the design, construction, rehabilitation, enhancement, maintenance, operation and financing of the route Tobia Grande Puerto Salgar San Alberto La Loma Bosconia Y de Ciénaga Santa Marta, which is one of the main roads in Colombia and connects the centre of the country with the Atlantic Coast. Investments The project estimated investment is USD $ 2.500 millions. Features The road is 880 Km long and has the following sections: Private sector participation Construction of a double lane between Tobiagrande Puerto Salgar. Rehabilitation of the existing road between Villeta Guaduas Honda. Rehabilitation of the existing lane and construction of a second lane between Puerto Salgar San Alberto. Rehabilitation of the existing lane and construction of a second lane between San Alberto La Mata La Loma Bosconia Y de Cienaga. The project includes the construction of a 10 Km viaduct. Acceptable bidders: The private participation scheme to be implemented will consider the need to increase the participation of financial and institutional investors, not only in the financing phase but as long term investors through equity participation. Status In process to hire an Investment Bank which will structure the concession. 4
Legal aspects Contact points The project will comply with the Transport Act (Act 105 of 1993) and the Administrative Contracting Statute (Act 80 of 1993). National Institute for Concessions - INCO Alfredo Perez Structuring Manager 3240800 Fax: 3240800 ext 1921 5
BUS RAPID TRANSPORT SYSTEM (BRT) SANTIAGO DE CALI Sector Sub-sector Objective Transport. Urban transport. To award the concession for the operation and collection of the bus rapid transport system in Santiago de Cali. Investments Features Infrastructure: US $292 mill. Buses and Collection system: US $170 mill. The system, based on bus technology, is composed by 49 km of main corridor routes connected with complementary feeding routes. The equipment cost is estimated at US$ 91 million with the tariff collection system included. The estimated construction time is 5 years, while the first stage (14 km) is expected to be completed in one year. The estimated demand is 815.400 passengers per week day. Private sector participation Bidding process for the infrastructure construction. Bidding process for the concession of the operation and collection services. Acceptable bidders: Strategic investors, financial investors, BRT operators, equipment suppliers and construction Companies, among others. Status Bidding process for the construction of Troncal Av. 3N (4,6km), opening in april, and Troncal de Aguablanca (6,17km), opening in June 2007. Operation bidding process for the fifth stage to be open in 2H 2007. Legal aspects 6
The project complies the provisions set forth in the Transportation Act (1993 Act 105), the Massive Transportation Act (1996 Act 310) and the Administrative Contracting Statute (1993 Act 80). Biddings for construction will be held under multilateral agency procedures. Contact points Metrocali Enterprise Luís Fernando Lían Arana President of Metrocali (2) 6689440 e-mail: metropresidencia@emcali.net.co National Planning Department Pedro Luis Jimenez Private Participation Group (1) 596 0312 e-mail: pjimenez@dnp.gov.co 7
BUS RAPID TRANSPORT SYSTEM (BRT) BARRANQUILLA Sector Sub-sector Objective Investment Features Transport. Urban transport. To award the concession for the operation and collection of Barranquilla s bus rapid transport system. The estimated investment is: Infrastructure: US$ 62 million. Buses and collecting system: US$ 106 million. The project is a Bus Rapid Transport System (BRT), structured as a transportation corridor network including the roadway for high-capacity buses which are fed by a system of short routes with lower demand. The purpose of this system is to satisfy current and future demand for transportation in the metropolitan area. The system will connect the main roadway trajectories of the metropolitan area with the regional and ruralurban transportation system. Therefore, such an interconnected system will guarantee a physically, operatively and tariff-wise integrated system, ensuring maximum demand coverage with optimum levels of service. The estimated demand is 507.600 passengers per week day. Private sector participation Bidding process for the design, construction, and concession of the operation and maintenance of the BRT. Acceptable Bidders: International consulting firms associated with national ones, Colombian engineering firms, financial investors, and urban massive transport operators among others. Status Bidding process for construction began 1H2007. The next sections of the system are in bidding process. 8
Legal aspects Contact points The project will comply the provisions set forth in the Transportation Act (1993 Act 105), the Massive Transportation Act (1996 Act 310) and the Administrative Contracting Statute (1993 Act 80). Biddings for construction will be held under multilateral agency procedures. Empresa Transmetro S.A Alvaro Osorio General Manager (5) 3660319/20/21/22 e-mail: aosorio@transmetro.gov.co National Planning Department Pedro Luis Jimenez Private Participation Group (1) 5960312 e-mail: pjimenez@dnp.gov.co 9
BUS RAPID TRASNPORT SYSTEM (BRT) CARTAGENA Sector Sub-sector Objective Investment Features Transport. Urban transport. To award the concession for operation and collection of the bus rapid transport system in Cartagena. The estimated investment is: Infrastructure: US$ 46 million. Buses and collecting system: US$ 77 million. The project is a Bus Rapid Transport System (BRT), structured as a transportation corridor network including the roadway for high-capacity buses, which are fed by a system of short routes with lower demand. The purpose of this system is to satisfy current and future demand for transportation in the metropolitan area. The system will connect the main roadway trajectories of the metropolitan area with the regional and ruralurban transportation system. Therefore, such and interconnected system will guarantee a physically, operatively and tariff-wise integrated system, ensuring maximum demand coverage with optimum levels of service. Private sector participation Bidding process for construction of the BRT first phase. Acceptable bidders: International consulting firms associated with local firms, Colombian engineering firms, financial investors, urban massive transport operators, among others. Status The first section of the system is under construction (1,1 km). Other sections of the system are in bidding process. Legal aspects The execution of the project will comply with the provisions set forth in the Transportation Act (1993 Act 105), the Massive Transportation Act (1996 10
Contact points Act 310) and the Administrative Contracting Statute (1993 Act 80). Biddings for construction will be held under multilateral agency procedures. Transcaribe S.A Enrique Chartuni González Transcaribe Manager e-mail: transcaribe@alcaldiadecartagen a.gov.co National Planning Department Pedro Luis Jimenez Private Participation Group (1) 5960312 e-mail: pjimenez@dnp.gov.co 11
BUS RAPID TRASNPORT SYSTEM BUCARAMANGA Sector Sub-sector Objective Investment Features Transport. Urban transport. To award the concession for the operation and collection of Bucaramanga s bus rapid transport system. The estimated investment is: Infrastructure: US$ 49 million. Buses and collecting system: US$ 65 million. The project is a Bus Rapid Transport System (BRT), structured as a transportation corridor network including the roadway for high-capacity buses, which are fed by a system of short routes with lower demand. The purpose of this system is to satisfy current and future demand for transportation in the metropolitan area. The system will connect the main roadway trajectories of the metropolitan area with the regional and ruralurban transport system. Therefore, such an interconnected system will guarantee a physically, operatively and tariff-wise integrated system, ensuring maximum demand coverage with optimum levels of service. Private sector participation Concession Bidding process for the design, construction, operation, and maintenance of the BRT. Acceptable Bidders: International consulting firms associated with local firms, Colombian engineering firms, financial investors, and urban massive transport operators, among others. Status During 2007, there will take place the bidding processes for the remaining infrastructure stages of the project. Metrolinea is preparing the bidding process for the operation and collecting system. 12
Legal aspects Contact points The execution of the project will comply with the provisions set forth in the Transportation Act (1993 Act 105), the Massive Transportation Act (1996 Act 310) and the Administrative Contracting Statute (1993 Act 80). Biddings for construction will be held under multilateral agency procedures. Metrolinea S.A National Planning Department Félix Francisco Rueda Pedro Luis Jiménez Manager Private Participation Group (7) 6440311 (1) 5960312 e-mail: pjimenez@dnp.gov.co 13
PUBLIC TRANSPORT STRATEGIC SYSTEMS Sector Sub-sector Objective Investment Features Transport. Urban transport. To award the collecting system, control, urban furniture and public parking lots, for cities with population between 300.000 and 600.000 people. For the 11 cities that are being consider in the project the estimated investment is US$439 million. The project has been conceived to cover the following cities: Armenia, Pasto, Manizales, Popayán, Santa Marta, Neiva, Valledupar, Montería, Villavicencio, Buenaventura e Ibagué; and it includes the following activities: Private sector participation Centralized collection system concession Public transport control systems concession Concession for the installation and maintenance of urban furniture Concession for the operation and management of public parking lots Traffic lights systems management Infrastructure adjustment Busses supply Acceptable Bidders: International consulting firms associated with local firms, Colombian engineering firms, financial investors, and urban massive transport operators among others. Status There are five cities undergoing pre-investment studies (Pasto, Valledupar, Armenia, Manizales, Santa Marta, Neiva y Buenaventura). The remaining cities are about to start the studies. Legal aspects The execution of the project will comply with the provisions set forth in the Transportation Act (1993 Act 105), the Massive Transportation Act (1996 14
Contact points Act 310) and the Administrative Contracting Statute (1993 Act 80). Biddings for construction will be held under multilateral agency procedures. National Planning Department Pedro Luis Jiménez Private Participation Group (1) 5960312 e-mail: pjimenez@dnp.gov.co 15
INTEGRATION AND CONCESSION OF MEDELLÍN, RIONEGRO, MONTERÍA, QUIBDÓ AND CAREPA AIRPORTS Sector Sub-sector Objective Transport. Air transport. To award the concession for the administration, operation, maintenance, renewal and expansion of a group of five (5) airports, in order to reach and maintain operation standards above the Service Level C 1. Investments The estimated investment is USD$100 Millions. Features According to the track and runway system capacity, the Rionegro s International airport can handle a maximum of 210,000 operations with 53 operations per hour in IFR (instrumental flight rules) conditions. According to the demand forecast for the year 2022 the airport expects to have approximately 49,500 operations per year; meaning that the actual capacity is able to manage the expected increments in traffic. The Medellin Airport, is certified as an international airport. In 2006 it moved 757.057 passengers, 5.057 cargo tons and 77.266 operations. The airport administration and operation is provided by the municipality of Medellin. The Monteria Airport operates as a local airport with a runway system that allows airplanes level C, with Visual Flight Rules (VFR) and Non Instrument approach procedure. According to the Federal Aviation Administration, the capacity is 14 operations during rush hours and 180,000 operations per year. According to the demand forecast for the year 2022 the airport expects to have approximately 14,000 operations per year; meaning that the actual capacity is able to manage the expected increments in traffic. The Quibdo Airport operates as a local airport with a runway system that allows airplanes level C, with Visual Flight Rules (VFR) and Non Instrument approach procedure. According to the Federal Aviation Administration, the capacity is 14 operations during rush hours and 180,000 operations per 1 IATA- International Air Transport Assosiation 16
year. According to the demand forecast for the year 2022 the airport expects to have approximately 18,000 operations per year; meaning that the actual capacity is able to manage the expected increments in traffic. The Carepa Airport operates as a local airport with a runway system that allows airplanes level C, with Visual Flight Rules (VFR) and Non Instrument approach procedure. According to the Federal Aviation Administration, the capacity is 14 operations during rush hours and 180,000 operations per year. According to the demand forecast for the year 2022 the airport is expected to have approximately 15,000 operations per year; meaning that the actual capacity is able to manage the expected increments in traffic Private sector participation Concession Bidding process Acceptable Bidders: Strategic Investors, Financial and Institutional Investors, operators and construction companies among others. Status STRUCTURE Investment Bank is structuring the project. Legal aspects Contact Points The project execution is within the framework of the Transportation Act (Act 105 of 1993) and the Administrative Contracting Statute (Act 80 of 1993) Aeronáutica Civil Miguel Acosta Financial Director 2662218 macosta@aerocivil.gov.co 17
RAILWAYS CONCESSIONS: FACARTATIVA-BELENCITO Sector Sub-sector Objective Investment Features Transport. Railways. To award the construction, rehabilitation, maintenance, management and operation of the Faca-Belencito railway. To be determined. The first railway project to be awarded, from the package of railways available for concession is the railway Facatativa Belencito. It is the connection between a steel and coal production zone in Boyacá with Bogotá. There is a special characteristic that is going to be considered during the structuring process Bogotá s suburbs train. The railway length is 360 km. Private sector participation Status Legal Aspects Acceptable Bidders: Strategic investors, financial and institutional investors, operators and constructors among others. The railway Facatativa-Belencito is being structure by the National Concession Institute. The project execution is within the framework of the Transportation Act (Act 105 of 1993) and the Administrative Contracting Statute (Act 80 of 1993) 18
Contacts Instituto Nacional de Concesiones INCO Miguel Bonilla Coordinador Grupo Férreo Tel 3240800 mbonilla@inco.gov.co 19
SALE OF THE NATION S SHAREHOLDING IN FIVE ELECTRIC UTILITY COMPANIES Sector: Sub-sector: Objective: Mines and energy. Electricity. To sale the Nation s shareholding in: Empresa de Energía de Cundinamarca S.A. ESP-EEC, Electrificadora del Meta S.A. ESP-EMSA, Empresa de Energía de Boyaca S.A. ESP-EBSA, Electrificadora de Santander S.A. ESP-ESSA, and Centrales Electricas del Norte de Santander S.A. ESP-CENS. INVESTMENT Estimated investment: US$ 400 Million for the Nation s shareholding in the 5 companies. Features The government has the control of these five companies attending regulated and non regulated users. Revenue comes from distribution and commercialization charges on regulated users and other revenues from the non regulated market. In addition, ESSA has generation and transmission activities while EBSA has generation activities. The energy transmission, distribution and commercialization activities in Colombia are regulated by the Energy and Gas Regulation Commission (CREG) and are supervised by the Public Domiciliary Services Superintendence SSPD-. The following table shows an overview of these companies: EBSA EEC ESSA CENS EMSA Assets (dic/31/06) 376 103 434 331 92 Debt (dic/31/06) 154 45 102 77 25 Equity (dic/31/06) 222 58 332 255 68 Operational Income (2006) 104 71 264 105 56 Nation s Shareholding 99,63% 88,14% 82,93% 79,00% 55,68% Total Users (dic 06) 384.414 187.243 480.362 316.595 170.845 (Figures in USD$ MM) 20
Private sector participation Possible Participants: Strategic and institutional investors and operators among others. Status The investment banker -Inverlink- BBVA- is in charge of structuring the process and designing the sale scheme. The sale program approval is expected to take in a Ministry session in June 2007. Legal aspects The current Act applicable to this project is Act 142 of 1994 and Act 143 of 1994. Furthermore, the activities of electricity distribution and commercialization are regulated by the CREG. In addition, the sale process of the Nation s shareholding in these companies is established by Act 226 of 1995. Contact points Ministry of Mines and Energy National Planning Ministry of Finance and Public Department Credit Manuel Maiguashca Carlos Eraso Carlos Caycedo Viceministro Subdirector de Minas y Energía Jefe Oficina de Participación Privada (1) 3245213 email: manuel.maiguashca@minminas.gov.co (1) 5960300 e-mail: ceraso@dnp.gov.co (1) 3381700 email: ccaycedo@minhacienda.gov.co 21
ECOPETROL SHARES PUBLIC OFFERING Sector Sub-sector Objective Mines y Energy Oil and gas The objective is to Issue an additional 20% of shares to raise funds to make investments, in order to consolidate the company s exploration business, to continue the development of mature and heavy oil fields, to initiate an internationalization phase and to achieve high quality standards on their refineries. Investments To be determined Features Make a public offer for the 20% of the total number of shares of Ecopetrol. With these resources the company will be able to have a budgetary, financial and management independence. For more information on the process consult: http://www.ecopetrol.com.co/contenido.aspx?catid=275&conid=39392 Private sector participation Status Possible participants: common sector and strategic investors. Ecopetrol already contracted legal advisors and investment bankers to structure the process. JP Morgan Credit Suisse where selected as the consortium for the structuring of the deal. Citibank - Merrill Lynch where selected as second valuators. Legal Aspects In December 2006 the Act 1118 was approved by the Congress, authorizing the company status modification from a state owned company to a Stock Corporation. 22
Contacts Ministry of Mines and Energy National Planning Ministry of Finance and Public Department Credit Manuel Maiguashca Carlos Eraso Carlos Caycedo Viceministro Subdirector de Minas y Energía Jefe Oficina de Participación Privada (2) 3245213 email: manuel.maiguashca@minminas.gov.co (1) 5960300 e-mail: ceraso@dnp.gov.co (1) 3381700 email: ccaycedo@minhacienda.gov.co 23
SALE OF THE NATION S SHAREHOLDING IN GECELCA (GENERADORA Y COMERCIALIZADORA DE ENERGÍA DEL CARIBE) AND URRÁ Sector Sub-sector Objective Investment Features Mines and energy Electricity To sale the Nation s shareholding in GECELCA and URRA. To be determined Gecelca started operations in February 1 st 2007 and is the biggest Thermal generator in the country with 31% share of the total thermal installed capacity. It generates electricity mainly with the Termoguajira Plant (302 MW net capacity) and with two Power Purchase Agreements PPA (Termoflores I and TEBSA). The Nation s Shareholding is 99%. Urrá S.A. ESP has a hydraulic plant on the Sinú River, at Cordoba Department. Urrá has four generation units with a total installed capacity of 335 MW, equivalent to 3.9% of the country s hydraulic installed capacity. The Nation s shareholding is 99.7%. Private sector participation Investment banks to structure the process. Possible participants: common sector and strategic investors. Status The Bidding Documents to hire the investment bank that will structure the process are under construction. Legal aspects The current Act applicable to this project is Act 142 of 1994 and Act 143 of 1994. Furthermore, the activities of electricity distribution and commercialization are regulated by the CREG. In addition, the sale process of the Nation s shareholding in these companies is established by Act 226 of 1995. 24
Contact points Ministry of Mines and Energy National Planning Ministry of Finance and Public Department Credit Manuel Maiguashca Carlos Eraso Carlos Caycedo Viceministro Subdirector de Minas y Energía Jefe Oficina de Participación Privada (3) 3245213 email: manuel.maiguashca@minminas.gov.co (1) 5960300 e-mail: ceraso@dnp.gov.co (1) 3381700 email: ccaycedo@minhacienda.gov.co 25
ISAGEN SHARES PUBLIC OFFERING Sector Sub-sector Mines and energy Electricity Objective Public offer of 523.973.000 preferred shares own by the Nation, equivalent to 19.22% of Isagen total outstanding shares. Investment COP $1.130 per share. Value of the total offer COP$592,089,490,000. Features ISAGEN is a mixed company (with private and state shareholders) of public services. It generates and commercializes electricity. It has 2.132 MW of generation installed capacity, equivalent to 16% of the county s total capacity. The company also commercializes natural gas, coal, steam and other energetic resources of industrial use in the secondary markets. By Decree 4482 of 2006, the strategy for the sale of the Nation s shareholding was approved. The process will have three stages. In the first stage the shares will be offered exclusively to the solidary sector, under the special conditions specified in the 1995 Act 226. In the second stage the offer will be open to the general public through a national distribution network. If there are shares remaining after the first two stages, they will be offer to the International Finance Corporation IFC, The Terms of the Stock Offering and related documents can be consulted on the following web page: http://www.isagen.com.co/metaacc.jsp?rsc=acc02 26
Private sector participation Acceptable Bidders: Members of the Solidary Sector, investors and general public. Status The fist stage of the process started February 28 th months. 2007, lasting two Legal aspects Contact points The current laws applicable to this project are: law 142 of 1994 and law 143 of 1994. Furthermore, the activities of distribution and commercialization of electricity are regulated by the CREG. In addition, the sale process of the Nation s shareholding in these companies is established by Law 226 of 1995. Ministry od Mines and Energy National Planning Ministry of Finance and Public Department Credit Manuel Maiguashca Carlos Eraso Carlos Caycedo Viceministro Subdirector de Minas y Energía Jefe Oficina de Participación Privada (4) 3245213 email: manuel.maiguashca@minminas.gov.co (1) 5960300 e-mail: ceraso@dnp.gov.co (1) 3381700 email: ccaycedo@minhacienda.gov.co 27
INVESTMENT ALTERNATIVES IN MINING Sector Mines and energy. Sub-sector Mining. Objective To award the concession to explore, develop and exploit mining areas of gold, cooper, molybdenum and coal. Investment To be defined. Features To award mining titles through bidding processes to strategic investors. The Ingeominas has identified the following areas as zones with good mining potential: Mineral Location Area Estimated Reserves Copper Molibdeno Acandí 1,652 Ha. Not defined Copper Molibdeno Pantanos 2,800 Ha. 62 MM Tons Gold Taraira 9,973 Ha. Not defined Coal Alto San Jorge 29,489 Ha. 590 MM Tons Coal Páramo del Almorzadero 27,188 Ha. 161.5 MM Tons Coal Tibita 9,846 Ha. 15.2 MM Tons Private sector participation Possible participants: Strategic investors and project developers. 28
Status The bidding process will begin May 4 th 2007 and the proposal presentation day is May 24 th 2007. Legal aspects Contact points The current Act applicable to these mining areas is the Act 685 of 2000 and the Administrative Contracting Statute (1993 Act 80). Ministry of Mines and Energy Manuel Maiguashca Viceministro (5) 3245213 email: manuel.maiguashca@minminas.gov.co INGEOMINAS Silvia Alvarez (1) 2221811 email: silvia.alvarez@minminas.gov.co 29
ATTRACTION OF A STRATEGIC OPERATOR TO PROVIDE THE NATIONAL POSTAL SERVICE Sector Telecommunications Sub-sector Postal Services Objective To attract a strategic operator (local or international, public or private) that operates the national postal services. Investment To be defined Features The Colombian Government is trying to consolidate the country s postal services trough a reform of the legal, institutional and regulatory framework. Attracting a strategic operator will contribute to promote the offer of new services, the modernization of traditional postal products and guarantee the improvement and development of this services. Private sector participation Possible participants: Strategic investors and postal or logistic operators. Status The process to hire the investment bank that will structure the process will start May 2007. Legal aspects The project will comply with the Administrative Contracting Statute (Act 80 of 1993) and was approved by the Conpes Document 3440 of August 2006 and the National Development Plan. 30
Contact points Telecommunications Ministry Ramón Angarita Lank (1) 3443460 email: rgangarita@mincomunicaciones.gov.co National Planning Department Guillermo Alberto Cruz Alemán Subdirector de Telecomunicaciones (1) 5960300 e-mail: gcruz@dnp.gov.co 31
COMPARTEL PROGRAM OF SOCIAL TELECOMMUNICATIONS Sector Telecommunications Sub-sector Social Telecommunications Objective Contracting new projects for the expansion of the Compartel Program of Social Telecommunication. Investment US$ 176 million Features Compartel was created in 1999 to promote the universal access for telecommunications. The program presents emphasis in rural areas and urban territory with high level of Unsatisfied Basic Necessities (UBN). Compartel finances business plans of private operators who commit to serve and operate under conditions of accessibility and nondiscrimination. Planning, structuring and monitoring social telecommunications projects. Estimated term of the project: 4 years (2007 2010) and has the following scope: Extension of mobile telephony cover in municipalities without service Connectivity service in micro, small and middle enterprises (MIPYMES) that do not have access. Extension and/or replacement of broadband networks. Broadband service for public institutions. Opening of new tele-centers. 32
Private sector participation Possible participants: o Utility companies. o Telecommunication companies. Status Bidding process to start 2T2007. Legal aspects Contact points The project will comply with the Administrative Contracting Statute (Act 80 of 1993). Telecommunications Ministry María Fernanda Gaitán CEO Compartel (1) 3443460 email: mfgaitan@mincomunicaciones.gov.co National Planning Department Guillermo Alberto Cruz Alemán Subdirector de Telecomunicaciones (1) 5960300 e-mail: gcruz@dnp.gov.co 33