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Uruguay: Plans for Infrastructure Projects Abound
Development Business / June 16, 1998

By Larry Luxner

MONTEVIDEO -- Uruguay XXI, the government's one-stop trade and investment agency, successfully staged its first U.S. conference May 15-17. The Miami meeting -- dubbed "Why Uruguay?" -- was aimed at luring foreign investors to Uruguay, particularly in major infrastructure projects tied to the country's membership in Mercosur.

Here's a look at some of these projects:

* Mercosur highway. French consulting firm BCEOM has been hired to do a feasibility study on construction of a major international superhighway linking Pôrto Alegre, Brazil, and Buenos Aires. The Uruguayan section of this 1,100-kilometer roadway would be 600 kilometers, and would "consist of highways that already exist and must be improved or reconstructed," according to a government report. "In a few cases, completely new sections will have to be built." The project, estimated at $240 million, is highly dependent on the proposed Buenos Aires-Colonia bridge (see main story).

* Gas distribution system. California's Pacific Enterprises has won a government bid to construct a natural gas and propane distribution system for customers living outside of Montevideo. The company says it'll partner with state oil and gas monopoly Ancap to build separate gas and LPG networks that'll reach 777,000 potential clients by 2003.

The combined system will cost up to $200 million over a five-year period. Under the bid terms of reference, Pacific Enterprises will be joined by Spain's Union Fenosa to develp and operate the new system. The new entity will receive natural gas supplies from Buenos Aires via a $100 million transmission pipeline extending across Uruguay's southern coast.

* Coastal train. Uruguay's State Railways Administration will issue a call for bids in August to build and operate a 17-mile-long coastal railway line linking Montevideo and the beach resort of El Pinar. Two Argentine firms -- Trenes de Buenos Aires and ABB-Daimler Benz Transportation Argentina -- together with Siemens and an Australian firm, will participate as consultants in the preparation of the RFP; Germany's Ferrostaal and Spain's CAF have also expressed interest in the $270 million project.

* Riachuelo marina. The government wants to build a $10 million yacht facility along the banks of the Riachuelo, on a site just inland from the Río de la Plata and a few miles from the terminal of the future Buenos Aires-Colonia bridge. The project would accommodate 550 boats on a 70-hectare tract of riverside land. A call for bids will likely be made later this year.

* Salto-Concordia bridge. The government is also proposing the construction of a $10 million bridge linking Salto, Uruguay, with Concordia, Argentina. The two-lane bridge would span 700 meters at a minimum height of 25 meters, and will be located 20 kilometers south of the Salto Grande hydroelectric plant, Uruguay's main electric generating facility. The maximum concession term is 20 years, but could be less depending on bidder's proposals.

"The impact of this undertaking could lead to other infrastructure works, such as the building of an international airport in Salto and further development of the tourist sector," says a government report.

* Montevideo cargo terminal. Construction of an $8 million cargo terminal has been proposed as a way to capitalize on Uruguay as a Mercosur transportation hub. In 1996, some 960,000 metric tons of cargo moved through Montevideo. The proposed terminal, to be built 14 kilometers northeast of the city center, would offer customs and transportation control facilities; plant and animal health control; open and closed warehouses; cargo consolidation and deconsolidation facilities, with docks for inbound and outbound goods; rail connections; offices for transport companies and freight forwarders, and services for crews and vehicles. Both the concession term and the fees will be defined in bidding documents to be made available later in the year.

* Privatizing Piriápolis port. Uruguay's Ministry of Transport wants to turn over operation and maintenance of the port of Piriápolis, 35 kilometers west of Punta del Este, to private hands. The port -- mainly used for tourism and boating -- could include development of shops and other commercial facilities. The ministry has already spent $20 million on various works, including sea breakers, a platform for trailers, and piers with mooring for 100 boats. Bids will be called this year, so that the winning concessionaire can start operations in December, just as the new tourism season begins.

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