China Harbour Engineering begins work on US$4 billion Bogota metro
Colombia's biggest infrastructure project delayed for one year by audit of bidding process
18 Nov 2020 | Michael Marray

A consortium led by China Harbour Engineering Company (CHEC),  a subsidiary of China Communications Construction Company, has begun work on the first metro line in Bogota.

The project was tendered under a design‐finance‐build‐operate‐maintain‐transfer (DFBOMT) model, and was awarded to APCA Transmimetro Consortium in Ocober 2019, following an international tender process. However, the work was held up for one year by an audit of the bidding process.

Colombian President Ivan Duque on October 20 took part in a signing ceremony for the project to proceed, and earthwork has since begun along the route in Bogota.

Bogota Metro Line 1 is the biggest infrastrucure project ever undertaken in Colombia, with a total construction cost of around US$4 billion. The line is expected to come into service in 2028.

Publicly owned Empresa Metro de Bogota is responsible for the implementation of the project. It awarded the concession to a consortium comprising of CHEC (85%) and Xian Rail Transportation Group Company (15%). Subcontractors include Brazil-based CRRC Changchun Do Brasil Railway Equipamentos e Servicos and Bombardier Transportation Espana.

Despite the role of CHEC, China is not involved in the financing of the project. The Colombian government is providing around 70% of the funding.

The International Bank for Reconstruction and Development, which is administered by the World Bank, has signed up to provide a US$600 million debt package. The European Investment Bank (EIB) and the Inter-American Development Bank (IDB) are lending US$480 million and US$600 million respectively.

The three institutions signed the debt package in August 2018, with the loans to Emprea Metro de Bogota guaranteed by the Republic of Colombia. This was the first public sector project financed by the EIB in Colombia, granted under its Climate Action and Environment Facility (CAEF), with the aim of fostering climate change mitigation by promoting the use of public transport and helping to reduce pollutant emissions.

As is typical in large projects, there was also a construction guarantee put in place by CHEC, guaranteeing the contractor’s performance.

In June of this year Spanish bank BBVA signed an agreement with CHEC to provide a construction guarantee facility worth US$90 million. This was the first transaction with an Asian client that was certified as green by BBVA in compliance with its sustainable transactional banking framework.

In July Empresa Metro de Bogota sold 2.4 trillion pesos (US$652 million) of bonds on the Bolsa de Valores de Colombia as part of its finance package. The 23-year bonds are guaranteed by the government. They were given a domestic AAA (col) rating by Fitch, reflecting their sovereign guarantee.

The metro will run on raised track to avoid earthquake risk, spanning 24 kilometres through the so-called Caracas Corridor in the southwest of the capital, where public transport demand is highest. The project will include the construction of 15 stations and acquisition of 30 trains. The operating and maintenance agreement runs for 28 years.

CRRC Changchun Railway Vehicles and CHEC signed the purchase agreement for the trains on October 16 at the CHEC headquarters in Beijing. 

CRRC Changchun will supply 30 unmanned trains of the highest automation level (GOA4) for Metro Line 1 as an exclusive supplier. With this deal, the company will have signed up to export around 1,200 trains to customers in South America.

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