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Thursday, January 14, 2010
Today's News Headlines
* New administration to resolve railway rehabilitation - Uruguay
* Govt to receive max US$8mn CCRIF earthquake payout, but country "horribly underinsured" - Caribbean, Haiti
* EFE launches tender for studies on Arica-La Paz rail line rehabilitation - Chile
* Petroperú to list shares on BVL exchange - Peru
* Sutel to report on telecoms sector ahead of auction - Costa Rica
* Govt to review railway concessions - Brazil
* Work to begin on Pisco airport expansion this year, says MTC - Peru
* Calderón opens Anzaldúas international bridge - Mexico
* La Unión port to start operations in April - El Salvador
* IN BRIEF CL Financial CEO resigns - Caribbean
* IN BRIEF MTC to expropriate land for Jorge Chávez airport expansion - Peru
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* New administration to resolve railway rehabilitation - Uruguay
Uruguayan president-elect José Mujica's administration will be the one to decide how to proceed with the rehabilitation of 414km of railways, an official from the rail line's concessionaire Corporación Ferroviaria del Uruguay (CFU) told BNamericas.
CFU, whose shares are fully owned by the Uruguayan state, was created to speed up the rehabilitation and expansion of the country's rail network.
State-owned rail firm AFE representatives expect the transport and public works ministry (MTOP) to make a decision regarding the rehabilitation of the railways before the second half of this year, the official added.
The tender process was put on hold after the offers presented by Chilean consortium Icil Icafal-Tecsa and Spanish consortium Hispánica-Monalisa were above the official budget.
AFE, CFU and other government representatives have already met with some members of the new administration to discuss the project in order to provide all the information necessary for the incoming authorities to make a final decision, the official said.
Mujica will take office on March 1, succeeding President Tabaré Vázquez. Both Vázquez and Mujica belong to the left-wing party coalition Frente Amplio.
By Eva Medalla
Business News Americas
* Govt to receive max US$8mn CCRIF earthquake payout, but country "horribly underinsured" - Caribbean, Haiti
The government of Haiti will receive the maximum US$8mn payout from its coverage with the Caribbean Catastrophe Risk Insurance Facility (CCRIF), but overall the country is "horribly underinsured," Matthew Pragnell, CEO of Caribbean insurance brokerage services group CGM Gallagher, told BNamericas.
A magnitude 7.0 earthquake struck close to Port-au-Prince, Haiti on Tuesday (Jan 12) evening, causing untold damage and still unknown loss of life.
CCRIF, which is managed by CGM Gallagher unit CaribRM and offers parametrically triggered coverage for natural catastrophes to 16 Caribbean countries, will make the largest possible payout - which is just over 20 times the US$385,500 Haiti pays in annual premiums - after a 14-day period, the group said in a statement.
However, because of the low insurance penetration in the country, there will only be minimal insured losses in Haiti and the event will likely not even constitute a major global insurance loss event, according to CaribRM CEO Simon Young.
LOW INSURANCE PENETRATION
CGM Gallagher's Pragnell said that the few Haitian insurance companies that do exist have very low levels of capital and do not take much advantage of reinsurance, but that Hannover Re will have some exposure, as will Lloyds, but on a facultative basis.
"There's a general distrust of insurance companies [in Haiti], because they're just not able to respond on large claims let alone a catastrophe of this nature," the executive, who is based in Jamaica, said, noting that the tragedy would likely push along some efforts in micro insurance from groups like the World Bank.
"Micro insurance will have more urgency, but you have to give the consumer the wherewithal to be able to buy it," Pragnell said. "[Haiti's] going to have to have enormous donor support [to begin recovery from the earthquake]."
RENEWED FOCUS ON EARTHQUAKES
CaribRM's Young also said there will be a renewed focus on earthquakes.
"Coming off a slow hurricane season, there will be a lot more talk about earthquake exposure in the Caribbean," he said. "This needs to be on the agenda all the time, but unfortunately it takes big events to bring it back to the forefront."
REGIONAL IMPACTS
While the Dominican Republic, Cuba and Jamaica felt the shake, there looks to be minimal damage in these countries.
"There's not going to be significant damage in the Dominican Republic," Young said. "But their portfolios are so much bigger that even a small level of damage on a percentage basis may be bigger than the total [insured] loss in Haiti."
The World Bank, the Caribbean Development Bank (CBD) and many other donors have assisted the development of CCRIF, which now counts Anguilla, Antigua & Barbuda, the Bahamas, Barbados, Belize, Bermuda, the Cayman Islands, Dominica, Grenada, Haiti, Jamaica, St Kitts & Nevis, St Lucia, St Vincent & the Grenadines, Trinidad & Tobago and the Turks & Caicos Islands in its member countries.
By James Newman
Business News Americas
* EFE launches tender for studies on Arica-La Paz rail line rehabilitation - Chile
Chile's state-owned rail firm EFE has launched a tender to determine the detailed engineering required to rehabilitate the Chilean stretch of the Arica-La Paz (FCALP) rail line, an EFE official told BNamericas.
Companies interested in taking part in the process must submit offers by January 22. Technical bids will be reviewed on the same day, while financial offers will be reviewed on January 28.
The awardee is scheduled to be announced on February 2.
The move follows the failure of two tenders to carry out the rehabilitation works after companies presented offers well above the official price-tag.
These studies will help EFE determine precisely what is needed to rehabilitate the line up to a class B standard according to internationally recognized quality standards, said the official.
The Chilean stretch of the railway connects northern port city Arica to district Visviri, on the border with Bolivia, along 206km with 18 stations.
FAILED TENDERS
Chile's state-owned Arica port administrator EPA, which is also responsible for administering the line, launched two tenders for its rehabilitation last year. The first was declared void in June and the second in December.
The second tender attracted the same three bidders as the first: Comsa Chile, Azvi Chile and Tecdra. However, the companies submitted offers of over US$45mn, well above the US$32mn budget set by the government for the works.
It was then decided that EFE would take over the tender process. Once the detailed engineering studies are carried out, EFE will launch a new tender and plans to invite Comsa Chile, Azvi Chile and Tecdra to take part, the official said.
The delays experienced in the rehabilitation process have pushed back the state's plan of having it ready to resume operations in 2011.
Authorities have yet to determine whether the line will be operated by the state or by a private concessionaire.
The Arica-La Paz line's Bolivian stretch- connecting Visviri to capital La Paz - runs 234km and is said to be in good condition.
The rehabilitation of the railway will help boost activity in Arica port, which saw a reduction in cargo handling when the line stopped working in 2005, after its Bolivian operator declared bankruptcy.
Once operations are resumed, the rail line is expected to transport 180,000-250,000t/y of cargo.
By Eva Medalla
Business News Americas
* Petroperú to list shares on BVL exchange - Peru
Peru's state oil company Petroperú will list shares on Lima's BVL stock exchange in February in an effort to boost transparency, state news agency Andina reported.
"This is important because it will require that we provide information to the BVL and adopt norms required by the BVL and securities regulator Conasev," Petroperú president Luis Rebolledo said.
The company has already adjusted internal procedures to adapt to the BVL norms, he added.
Petroperú, meanwhile, is also taking steps to submit audited financial results. Internal information systems are being modernized in a process set to be completed in 2011.
"We're also taking steps to improve tender processes," Rebolledo added.
By Business News Americas staff reporters
* Sutel to report on telecoms sector ahead of auction - Costa Rica
Costa Rica's telecoms watchdog Sutel will present a report on January 18 on the state of the telecommunications sector and conditions for an upcoming tender for mobile spectrum, according to utilities regulator Aresep.
Of the 160MHz available, 60MHz belongs to state-owned telco ICE and the remaining 100MHz will be up for grabs in three bands - 850MHz, 1800MHz and 2100MHz.
A document with terms and conditions is available for viewing at this link (http://www.aresep.go.cr/cgi-bin/index.fwx?area=04&cmd=servicios&id=8302)
Costa Rica is due to be one of the last countries in Latin America and the Caribbean to liberalize its mobile telephony market as part of the Central America and Dominican Republic free trade agreement with the US (Cafta-DR).
Central American/Caribbean operators Digicel, Cable & Wireless and Millicom (Nasdaq: MICC), as well as América Móvil (NYSE: AMX) and Telefónica (NYSE: TEF), have all expressed interest in entering the market.
By Business News Americas staff reporters
* Govt to review railway concessions - Brazil
Brazil's federal government will review its railway concession model to make better use of railroad networks and extend concession periods, news service Agência Estado reported.
In addition to its small size (28,000km), the railway network is under-used, according to national ground transport agency ANTT.
"Only 10% of railroads (3,000km) are in full use," ANTT director Bernardo Figueiredo was quoted as saying in the report.
Another 7,000km are operating below capacity and 18,000km are well under-used.
One of the main objectives of the changes is to put abandoned or low-capacity stretches back into operation, the report said.
Among the revisions under consideration is the concession of certain stretches.
Current concessionaires will have the option to continue operating the stretches or to return them to the government.
If the company continues to operate a concession, it will have to maintain the infrastructure. Rehabilitation of all stretches must be carried out so that it is available for use, according to Figueiredo.
"We cannot continue abandoning stretches while there is a strong demand for rail transport," Figueiredo said.
América Latina Logística (ALL) (Bovespa: ALLL11), which manages an unused railway stretch in São Paulo state, said in a previous report that there are not enough clients to justify rehabilitation investments on its 200km stretch right now.
Railway concessions have been operating in Brazil for 12 years.
By Business News Americas staff reporters
* Work to begin on Pisco airport expansion this year, says MTC - Peru
Expansion work on Pisco airport in Peru's Ica region is set to begin in 2010, according to the country's transport and communications ministry (MTC).
The expansion will cost some US$40mn, and includes the construction of a new terminal and complementary installations.
The airport, which is located 290km south of Lima, will provide an alternative to the capital's Jorge Chávez terminal in case of congestion or bad weather.
Following the expansion, the airport will also become the first in Peru to specialize in low-cost airlines, transport minister Enrique Cornejo was quoted as saying by state news agency Andina.
Pisco airport is operated by concessionaire Aeropuertos del Perú (ADP), which was awarded the country's first package of regional airports in December 2006.
The package also included airports in cities Tumbes (in the region of the same name), Talara (Piura), Trujillo (La Libertad), Chiclayo (Lambayeque), Anta-Huaraz (Ancash), Chachapoyas (Amazonas), Cajamarca, Tarapoto (San Martín), Iquitos (Loreto), Pucallpa (Ucayali) and Piura.
By Business News Americas staff reporters
* Calderón opens Anzaldúas international bridge - Mexico
Mexican President Felipe Calderón has officially opened the 5km Anzaldúas international bridge, which links the city of Reynosa in Tamaulipas state to Mission county in Texas, the presidential website reported.
The bridge's Mexican side was built by local firm Marhnos, which was awarded a 30-year concession to build and operate the structure by Mexico's transport and communications ministry (SCT) in 2007.
Construction cost 846mn pesos (US$66.3mn), of which 388mn pesos was provided by the company.
The Mexican side of the bridge is 2.5km long, with four lanes, and is expected to handle 7,000 light vehicles every day in its first phase, which was opened on December 15.
A second phase, to begin in 2012, will include special cargo lanes.
The bridge represents a symbol of cooperation between Mexico and the US, and is a sign that Mexico is on the road to economic recovery, Calderón said at the inauguration ceremony.
By Business News Americas staff reporters
* La Unión port to start operations in April - El Salvador
El Salvador's La Unión port will start operations in April under the administration of national ports authority Cepa, local paper Prensa Gráfica reported.
Cepa will invest some US$15mn to buy equipment for the port including two post-Panamax gantry cranes and four rubber tired gantry cranes (RTGs). The equipment will be bought second-hand from ports in the US, the report said.
All of the equipment is in good condition and if the port is concessioned it could be handed over to the operator, according to Cepa president Guillermo López Suárez.
At the same time, the Japanese overseas coastal area development institute (OCDI) has been carrying out financial and operative studies before the terminal starts operations.
According to these studies, the cargo to be handled at La Unión will be mainly transported to Nicaragua and Honduras, facilitating trade between these Central American countries.
La Unión port will have the capacity to transport 50,000 cargo containers in 2010, according to the results of the first phase of a technical study carried out by the Japan International Cooperation Agency (JICA).
The results correspond to the first phase of JICA's US$1.2mn market study, which is expected to be completed by mid-2010.
Construction of the La Unión port began in 2005 and ended in 2009, and cost over US$180mn. It has been inoperative since construction consortium Toa-Jan De Nul handed the completed facility over to Cepa on December 29 last year.
By Business News Americas staff reporters
* IN BRIEF CL Financial CEO resigns - Caribbean
The CEO of Trinidad & Tobago-based financial group CL Financial, which was rescued by the country's government in January 2009, has resigned and will leave the company at the end of this month, local press reported.
Steve Bideshi led the company since July 2009 and had "completed his obligations," according to a statement from CL Financial chairman Shafeek Sultan-Khan.
By Business News Americas staff reporters
* IN BRIEF MTC to expropriate land for Jorge Chávez airport expansion - Peru
Peru's transport and communications ministry (MTC) expects to expropriate more than 80% of private land next to capital Lima's Jorge Chávez international airport to make way for the construction of a second runway by March, according to transport minister Enrique Cornejo.
The land will be transferred to airport concessionaire Lima Airport Partners (LAP), which has a contract to carry out expansion and improvement works on the airport.
The expansion project is scheduled to be completed by 2014, and is expected to increase the number of international passengers making stopovers at the airport by 30%, government news service Andina reported.
By Business News Americas staff reporters
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In-deph interview
*
Citibank Peru corporate finance VP Alberto Carrera
Peru
http://www.bnamericas.com/interviews/privatization/Citibank_Peru_corporate_finance_VP_Alberto_Carrera-/169883934
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Main companies covered in today's news
* Superintendencia de Servicios Sanitarios
http://www.bnamericas.com/company-profile/en/Superintendencia_de_Servicios_Sanitarios-SISS/169883934
* Secretaria de Comunicaciones y Transportes
http://www.bnamericas.com/company-profile/en/Secretaria_de_Comunicaciones_y_Transportes-SCT_Mexico/169883934
* Japan International Cooperation Agency
http://www.bnamericas.com/company-profile/en/Japan_International_Cooperation_Agency-JICA/169883934
* Ministerio de Transportes y Comunicaciones
http://www.bnamericas.com/company-profile/en/Ministerio_de_Transportes_y_Comunicaciones-MTC_Peru/169883934
* Hannover Rückversicherung AG
http://www.bnamericas.com/company-profile/en/Hannover_Ruckversicherung_AG-Hannover_Re/169883934
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