Four consortia comprised of construction, security and catering companies from the US, Latin America and Europe are bidding for the first ever public-private participation (PPP) project for a new prison in Uruguay, which should help reduce overcrowding in the country’s prison system.
FERRERE is advising one of the bidders, CGL, which is a subsidiary of US real estate company Hunt, as well as British security company G4S.
Two more consortia – one formed of Mexican and Uruguayan construction companies Tradecco Infraestructura and SACEEM, the other comprising Spanish electrical equipment manufacturer Instalaciones Inabensa, Uruguay’s Goddard Catering Group and Abengoa’s Uruguayan subsidiary – are understood to be relying on in-house counsel. Counsel to a fourth consortium, comprised of Marvali and CONAMI, could not be confirmed.
The companies submitted their proposals to the Interior Ministry at the end of July, which are now being considered by a committee at the Ministry before the contract is awarded later in the year.
FERRERE associate Carla Arellano describes the Uruguayan prison system as in a state of emergency in terms of overpopulation. “This project will expand the total inmate capacity by 25 per cent”, she says. Upon completion, the new prison will have room for 1,960 inmates, requiring an initial investment of US$80 million during the construction stage.
Under the contract, private companies with oversee the construction of the prison and provide services, such as food services for inmates and staff, laundry, cleaning, pest control and commissary for a 22-year term, while security will remain in the hands of the state.
The project is the first to be awarded under a new PPP law passed in July 2011, which established a new regulatory regime aimed at boosting private sector involvement in infrastructure projects formerly provided by the state.
“From the outset of the administration of the current President José Mujica, the government has been looking into the possibilities for public-private participation projects for infrastructure works,” Arellano says.
Article published in Latin Lawyer on Friday, 30 August 2013.