RUBAU GROUP AND SLOANE TAKE THE INITIATIVE IN COLOMBIA BY PROPOSING A 101 MILLION EURO PPP FOR THE CENTRAL RAILWAY LINE

June, 2018

RUBAU, together with SLOANE has proposed a public-private partnership (PPP) to the Agencia Nacional de Infraestructuras de Colombia (National Infrastructure Agency of Colombia) (ANI), for a concession project on the central railway line that will carry freight from La Dorada, Caldas to Chiriguaná, in César, and from there to the ports of the Atlantic Coast.

Unlike traditional public procurement procedures, the formulation of infrastructure projects through the Private-Public Partnership (PPP) mechanism allows the private sector to take the initiative, presenting proposals to develop projects. Traditional client-supplier roles are therefore left aside to give way to an agreement between the public sector and the private sector based on shared objectives, to design, construct, finance, operate and maintain public infrastructure projects.

This project, which aims to move six million tonnes of freight each year, of which at least two million tonnes will be coal, is based on a feasibility study by the ANI. If approved, it will require an investment of 101 million euros, with an operating, maintenance and refurbishment concession over the line for 30 years. The project involves the introduction of a toll with a per tonne/kilometre tariff, 50% of which will cover the costs of line usage and the rest the cost of the six logistical centres in Dorada, Puerto Berrío, Carare, Barrancabermeja and Gamarra, which will operate along the line (line usage and transfer costs).

The narrow-gauge works will begin at México station in La Dorada, Caldas, from where they will advance towards Puerto Berrío, Antioquia, passing through Carare, crossing Cuatro Bocas, a region typical of the coal and metallurgy sector, reaching Barrancabermeja, in Gamarra, Santander and will then finish in Chiriguaná, César where the works will join up with the Fenoco lines. Six transfer centres will also be built for loading operations.

The concession will provide for the use of General Electric C-21 locomotives built in Brazil which meet all the mechanical, environmental and weight requirements to be able to travel the 558 kilometre narrow-gauge central railway of Colombia, and will mean that there will be approximately 800 km of fully updated and operational railway line for public service.

RUBAU began operating in Colombia in 2012 in public procurement, taking part in civil infrastructure and building projects. It is currently carrying out works for various entities, both public and private, across the entire country. Additionally, Grupo Rubau has broad international experience in concessions in the field of transport infrastructure.

For its part, Sloane Energy Group is an owner of the group Private Equity Tatis Capital, which is already investing in Colombia in the Mining Energy and Logistics sector. The Company is developing the Project of National and Strategic Interest – PINE – for Colombia called “LA LUNA” in César (adjacent to Drummond’s El Descanso mine).

This is the first time that GRUPO RUBAU has participated as bidder for a concession and it is doing so in the certainty that it would be contributing a highly profitable logistical project to the country that would eventually generate 200 direct jobs and would strengthen the transport network of the country.