Transforming the Andes with a $1.54 Billion Highway Project
In a major move set to transform the infrastructure landscape of Peru’s highlands, the Private Investment Promotion Agency (PROINVERSIÓN) is gearing up to award the Longitudinal de la Sierra Section 4 project by December 2024.
This ambitious undertaking, valued at a staggering US$ 1.54 billion, promises to deliver crucial improvements to over 900 km of roads, bringing a much-needed upgrade to the transport networks of Junín, Huancavelica, Ica, Ayacucho, and Apurímac. With seven prequalified companies vying for the concession, the project marks a key step forward in Peru’s mission to modernise its roadways and stimulate regional development.
A Milestone in Infrastructure Development
The Longitudinal de la Sierra project, backed by PROINVERSIÓN on behalf of the Ministry of Transport and Communications (MTC), is no ordinary road upgrade. It’s a comprehensive plan that aims to improve access and connectivity across Peru’s diverse regions, particularly those often underserved by major infrastructure initiatives.
The scope of the project is vast. Covering a total of 900 km, the plan involves 627 km of initial periodic maintenance, 148 km of full rehabilitation and improvement, as well as the construction of the 5-km San Clemente Bypass in Ica. On top of that, other sections of the road will be handed over to the concessionaire for operation and maintenance for the duration of the concession, which is expected to last 25 years.
This extensive overhaul is expected to benefit approximately 1.6 million people across multiple regions, significantly improving transport efficiency, safety, and accessibility for both rural and urban communities. The upgraded road will ease travel, reduce transport costs, and foster economic activity by facilitating trade and movement between regions.
Competitors for the Concession
PROINVERSIÓN has attracted some of the biggest names in global construction and infrastructure for this high-profile project. Seven companies have been prequalified to submit their technical and economic proposals, each bringing a wealth of experience and expertise to the table. These companies include:
- Sacyr Concesiones SL – A major player in the infrastructure sector, with extensive experience in Latin America.
- Concesionaria Vial del Centro – Known for its robust track record in road concession projects.
- Obrascon Huarte Lain SA (OHL) – A Spanish multinational with a strong foothold in large-scale construction.
- China Communications Construction Company Ltd (Peru Branch) – One of the largest infrastructure development companies globally, and a key operator in international projects.
- Consorcio Carretera de los Andes – A consortium specifically formed to tackle projects in Peru’s Andean regions.
- Operadora Surperú SA – A local firm specialising in road operations and maintenance.
- R&R Consortium – A joint venture with experience in infrastructure projects across South America.
The competition for this concession is expected to be fierce, with each contender offering unique strengths. The winner will be tasked with not only constructing and rehabilitating the highway but also maintaining it for 25 years, ensuring that the road remains in top condition throughout its lifespan.
A Boost for Peru’s Highlands
The project is set to be a game-changer for Peru’s highland regions, which have long struggled with underdeveloped infrastructure. Junín, Huancavelica, Ica, Ayacucho, and Apurímac are poised to see significant benefits from the improved road connectivity, which will help drive economic growth and improve quality of life for residents.
Agricultural producers, in particular, are expected to benefit from the improved transport links. With better roads, farmers will have easier access to markets, reducing the time and cost associated with transporting goods. This, in turn, will boost trade and create new opportunities for local businesses to expand their reach beyond regional borders.
Tourism, another critical industry for these regions, is also likely to see a positive impact. The improved highway will make it easier for tourists to travel to popular destinations such as Ayacucho and the Andean highlands, encouraging more visitors and generating revenue for local economies.
Sustainability and Long-Term Goals
While the immediate benefits of the Longitudinal de la Sierra Section 4 project are clear, the long-term sustainability of the road network is a critical consideration. By structuring the concession to include maintenance over a 25-year period, PROINVERSIÓN and the MTC are ensuring that the road will remain functional and safe for decades to come. This is an essential aspect of the project, as too often infrastructure improvements fall into disrepair after their initial construction phase due to inadequate maintenance.
Moreover, the concession model allows the government to offload some of the financial burden of long-term maintenance onto the private sector, while still retaining oversight and control through regulatory frameworks.
This public-private partnership (PPP) approach is an effective way to manage large-scale infrastructure projects, ensuring that they are not only built to high standards but also maintained in a cost-effective manner.
Timeline and Next Steps
With December 2024 set as the target date for awarding the concession, the next few months will be crucial for the bidding companies. Each will need to finalise their technical and economic proposals, demonstrating not only their ability to complete the project but also how they will manage and maintain the road over the long term.
Once the winner is announced, work on the project is expected to begin promptly, with the first phase focusing on maintenance and rehabilitation of the existing road sections. Given the project’s scale, it’s anticipated that construction and improvements will take several years to complete, but the benefits for the region will start to be felt almost immediately as better-maintained roads lead to safer, more efficient travel.
The Longitudinal de la Sierra Section 4 project represents a pivotal moment for infrastructure development in Peru’s highlands. By investing in this key roadway, PROINVERSIÓN and the MTC are setting the stage for sustained economic growth, improved regional connectivity, and enhanced quality of life for millions of Peruvians.
As the bidding process heats up, all eyes will be on the December 2024 concession award, which will mark the beginning of a transformative journey for Peru’s road networks. With global heavyweights in the mix and the stakes high, this project is sure to become a landmark in the country’s infrastructure development story.
