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Latin America Investment News on Viva Tropical

Quito’s Billion Dollar Metro: Too Expensive to Build?

Article Summary:

It’s a bit foggy if Ecuador’s Quito metro will be built. The project still depends upon the approval of several multinational credits as well as state and federal funding. The pledge of the money is there, but can Ecuador pay the estimated $1 billion price tag?

Photo Credit: El Comercio

Original Article Text From El Comercial via Google Translate :

The Metro Will Start With USD 64.8 Million

The construction of the first metro Quito still depends on the approval of several multinational credits, the contribution of the Government and the borrowing capacity of the Municipality. The budget for the first phase are now available. The project has a total cost of USD 1400 million. Of this amount, the municipality must contribute with USD 700 million.

The first 120 will come out of the budget and 80 Tababela airport.

To fill the gap, the council should borrow another $ 500 million. The level of indebtedness of the municipality, in accordance with the approved budget for 2012 is 14% of total revenues. That includes borrowing capacity of $ 43.2 million per year. The construction process raises two phases: the first is the location of the stations cupcake and Labrador.

Is expected in November this year begins with the first and in March 2013, with the second, due to the postponement of the start of operations at the airport Tababela. For the first phase will require USD 64.8 million. According to Edgar Jacome, Metro Unit manager Quito, this amount is already available (half put the government and the other half, the Municipality). “The budget is ready in the Ministry of Finance and the City”. The first phase was tendered in July.

Until September 7 bids will be received. International companies in Mexico, Brazil, Argentina, China, Korea, France, Spain and Germany have shown interest in the project. The second phase will begin in August 2013 and their duration will be 36 months. Engineering studies by Metro Madrid, handed to the Mayor Augusto Barrera, Sept. 10.

The tender will be in December. Bids are due in May and June 2013. For this stage still not realized the $ 700 million offered by the national government. For two years, the Metro Unit and the Ministry of Finance have jointly managed credit in the Andean Development Corporation (CAF), the Inter-American Development Bank (IDB) and the European Investment Bank (EIB). Jacome said the EIB already approved the loan, contract signature is missing.

The CAF and the IDB are pending passing. That is, the Government’s contribution will be in debt. In the offices of the CAF and the IDB in Ecuador confirmed that there are two processes for appropriations for Quito metro, but said they can not give more details until the completion of the process. However, it was learned that the process has advanced by 90%. Proceedings are pending as sustaining passenger demand studies and social impacts.

The final evaluation mission of CAF and the IDB will visit Quito on September 7. This should provide the advisory report to their managers. This step aims to materialize the credit in November of CAF and in December, the IDB. These three lines of credit are added two that still manages the municipality. Councillor Elizabeth Cabezas, vice president of the Budget Committee, explained that two credits will be requested to cover the remaining $ 500 million.

The first loan to the Bank is managed Ecuadorian Social Security Institute (BIESS), for $ 300 million. The second exit of trains providers. The bid will be requested to submit proposals along with funding options, for $ 200 million. According to Cabezas, these two credits will be paid with surplus underground operation and if necessary municipal budget resources. If the schedule is met, the first subway trip out in August 2016. The system will mobilize 15,000 people per trip between Quitumbe and Labrador. Tunnel will have several fronts.

Deputy Mayor Jorge Alban reported 10 days ago that the postponement of the start of operations at the airport Tababela to February 20, yes delay the construction of the subway. Alban argued that while the airport continues to operate will fail to make the perforation tunnel. The excavation was to begin in the north to reach the city center.

Edgar Jacome denied that version. He explained that the delay of four months of the season The Labrador does not affect the overall schedule of the work, which should culminate in August 2016. The second phase will begin in August 2013 and lasted 36 months, long enough to finish the work in Labrador, whose term is 18 months. For this reason, Jacome said that if there was a further delay the airport, that when asked by the flower exporters Tababela not open on February 20 in mid-March but, not be affected.

“The Labrador may well start with the second stage.” In the building there will be four fronts: The Labrador, Solanda, San Francisco and Quitumbe. The perforation may at any of these sites, not necessarily in one.

Link to Original Article:

From El Comercio

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