Mexico relaunches Pacifico Sur concession

Mexico cancelled the tender for the 30-year roads concession earlier this year after receiving only one bid. The sole bidder, Mexican developer IDEAL, says it is considering another bid under the new procurement.

Mexico has relaunched the tender for the 30-year roads package known as Pacífico Sur after cancelling a previous procurement process earlier this year.

The concession involves the construction of two roads totaling 140 kilometres as well as the operation of 168 kilometres of roads connecting the central-western cities of Guadalajara and Tepic, according to the Mexican government procurement website.

Under the previous tender, launched in June 2010, the government received interest from parties including OHL Concesiones México, México Constructora Industrial, and Mexicana de Global Vía Infraestructuras, according to a document on the Mexican government procurement website. But only Mexican developer Impulsora para el Desarrollo y el Empleo en América Latina (IDEAL) submitted a bid for the project in April.

But Mexico’s ministry of transportation and communications, the Secretaría de Comunicaciones y Transportes (SCT), declared IDEAL’s bid unsatisfactory, saying that it did not meet the government’s price expectations. A document from the undersecretary of infrastructure indicated that IDEAL had proposed a structure that included an initial payment of Ps.$4 billion (€237 million; $337.7 million).

A spokesperson for IDEAL confirmed that the company is considering another bid under the new procurement.

IDEAL focuses on development of roads, water treatment, energy and social infrastructure projects. Until 2005, it was part of Grupo Financiero Inbursa, the holding company of Mexican billionaire Carlos Slim.

The government announced the tender for the project on June 14, according to the procurement website. The project is expected to be operating by November 2013, according to an SCT document.

The Pacífico Sur roads, along with another set of roads known as the Pacífico Norte package, were previously part of a larger concession known as FARAC II.

The Fideicomiso de Apoyo para el Rescate de Autopistas Concesionadas (FARAC), or the Trust for Supporting the Recovery of Licensed Highways was previously part of Mexico's ministry for roads and bridges but is now part of FONADIN, Mexico's national infrastructure fund. It was responsible for taking charge of Mexico's private toll roads in the 1990s and re-privatising them

The FARAC II concession was cancelled in 2009. The third FARAC concession, which involved the construction and rehabilitation of nearly 300 kilometres in the state of Tamaulipas, received interest from bidders including a consortium comprised of Macquarie, Portuguese transport operator Ascendi, and Brazilian toll road operator CCR, but Mexico also rejected all bids for the FARAC III concession last year.