All about Chinchero Airport

The project of the International Airport of Chinchero is an ambitious work, emblematic and much awaited by the cuzqueños and all Peruvians. For this reason, the Ministry of Transport and Communications (MTC) is committed to the implementation of this new airport terminal, which will improve the quality of services and contribute to local, regional and national development.

It is a priority for MTC to continue with the process to make Chinchero International Airport a clear and transparent way. In this sense, we make available to citizens and all interested parties this space that gathers all information and documentation on the concession process, the choice of land and modifications to the contract for the construction of the new airport in Cusco.

  •  Location of the Project
  • District: Chinchero
  • Department: Cusco
  • Province: Urubamba
  • Location: 29 km from Cusco by road
  • Population: 9422 inhabitants

Benefits

At the economic and social level

Cusco will earn approximately US $ 63 billion in profits during the 40 years of concession. Only in airport revenues, each year the Chinchero International Airport will receive an average of US $ 81 million.

To this is added that about 6 million more people will travel to Cusco every year. According to figures from 2015, the current International Airport Alejandro Velasco Astete had a movement of just 2.9 million passengers.

More than 2,500 direct jobs will be created in the construction and operation stages of the airport. It is anticipated that the communities of Yanacona, Ayllupongo and Racchi Ayllu will be able to make Handicrafts Fairs closer to the passengers. This will increase trade and improve the living conditions of the population.

At the infrastructure level

The passenger terminal will have IATA standards and will occupy 40,000 m2. The airstrip will be 4,000 meters long by 45 meters wide, allowing it to serve large aircraft. The aircraft-parking platform will be 140 thousand m2 and will have capacity for 13 positions. The design will be friendly to the landscape of the area and will feature a category 1 instrument landing system.

 Choice of terrain

Chinchero was one of five (5) lands that received a technical visit, between 2010 and 2012, of the ALG Company (associated with Europaxis) in order to be evaluated and to determine if it was viable to build there the new international airport.

In addition to Chinchero, the other four (4) points visited in that time span were: Anta, Occoruro, Quillabamba and Canchispampa.

In all five cases, the reports and studies carried out in the 1980s were also taken into account.

In this first phase of collection and visits, topographic and meteorological information was collected, so that the technical criteria of validation are defined and, finally, to discard the points that are not viable. Thus, for the second phase, only the analysis of the lands of Anta, Occoruro and Chinchero remained.

With these three points chosen for their viability, the evaluation criteria and their respective weighting were defined; To which the environmental, technical and socio-economic analyzes are submerged for each site. This set of factors is called Multicriteria Analysis by which each alternative (including Chinchero) is rated by scores.

Contest Process

Concession Contract

The State, represented by the Ministry of Transport and Communications (Grantor), signed an original contract containing a series of generalities, which allowed for different interpretations. These problems were detected both by the Comptroller General of the Republic (see document) and by the CAF (see document), which was an external State advisor on this issue. These generalities are based on: The application of the formula for calculating the Quarterly Work Pay. This formula contains an implicit rate (average rate of financing) that is not bounded. This means that the amount is exposed to market conditions and other project costs. In that sense, it is important to note that these generalities led to a problem that could affect us. The interests that the State would have had to pay were very high. Therefore, the MTC was in the dilemma of whether to motivate the expiration of the Concession or make a contractual modification. The Contraloría warnings Regarding Co-financing through the PAO Payment Fund, which does not consider a maximum indebtedness rate for the ODP calculation, the Comptroller’s Office states that it is necessary that PROINVERSION before awarding the good pro assesses the pertinence of setting a cost of Maximum indebtedness or another mechanism that controls the risk that the rate of indebtedness is the most favorable to the interests of the State. Regarding the deadline for filing the “Financial Closure”, the Comptroller maintains that it is necessary that PROINVERSION before awarding the good pro assesses the pertinence of considering a definite term for the Concessionaire to present the Financial Closing. Finally, the Peruvian State decided not to expire said Concession because it would reduce the social benefits that would bring to call a new contest. Thus it was decided to modify the original contract through an Addendum. To this end, it was necessary to determine whether, during the promotion process of the Chinchero International Airport, the bidders knew or acceded to the financial reports of the Integral Consultant. If not, each bidder could apply different methodologies and assumptions to formulate their proposals. Therefore, Comptroller suggests to renegotiate with the Concessionaire the interest rate or its equivalent in quarterly OAP quota.

Modification of the contract

First we must clarify that there is NO new contract. Simply, the State has made modifications to the original Concession Contract through Addendum No. 1. Thus, with Addendum No. 1, the Concessionaire could start works without the State, given the problem described above, to assume those costs and expenses for obtaining the necessary financing for the stage of execution of works. For this, the mechanism of payments was changed and it went from a scheme of deferred payments to one of payments against advance of work. Under this amendment, the State does not assume any greater obligation in terms of co-financing than that assumed in the tender. Therefore, sub-stage 1, sub-stage 2 are still co-financed; While sub-stage 3 remains at the Concessionaire’s risk and expense. Thus, the payment for the co-financing of the State is and will be US $ 265 million, without interest or additional costs above that amount. The period the State has to pay is and has been based on the approved Work Program for the project, which lasts for 5 years. We decided not to expire the concession contract and to continue with this project that will benefit the Cusco and all Peruvians.

Documents

http://www.mtc.gob.pe/todosobrechinchero/documentos/

 

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