Peru’s agriculture minister Adolfo de Cуrdova said the Majes-Siguas II irrigation project may be carried out as a public works project, after the concession tender for the initiative was declared void.

Three firms and two consortiums had prequalified for the tender. None, however, presented a bid. The reluctance is thought to be due to an imbalance in the financial risks associated with the concession contract, congressman for Arequipa Juan Carlos Eguren told BNamericas.

“Apparently, the concessionaires felt all the associated risks were on their side, and the state is not taking on its fair share of the risk,” Eguren said.

The shortlisted firms were Brazil’s Camargo Corrкa, compatriot firm Odebrecht, Spain’s OHL, and consortiums Consorcio Irrigaciуn Majes-Siguas II, formed by Peru’s Graсa y Montero and Brazil’s Andrade Gutiйrrez, and Consorcio Majes, formed by Besco, the Peruvian branch of Chilean construction firm Besalco, Peru’s JJC and Chile’s Mas Errбzuriz.

Following the failed tender, de Cуrdova said the government would consider different technical and economic alternatives for Majes-Siguas II, including turning the initiative into a public works project, government news agency Andina reported.

The project will cost some US$235mn, of which the government could provide up to US$140mn, with the rest being funded by international lending agencies, according to local press reports.

Majes-Siguas II was first scheduled to be awarded on August 31 last year, but suffered a series of setbacks, with private investment promotion agency ProInversiуn pushing back the tender schedule at least five times.

The initiative includes construction of the 1Bm3 Angostura dam, a 16.5km water transfer tunnel and the installation of irrigation infrastructure in Pampas de Siguas and Pampas de Majes.

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