Mexico's first public bid for electric transmission lines

Authors: Hernán González Estrada, Alejandro Aguirre, Carlos Francisco Campuzano Publication | February 7, 2018
Mexico's first public bid for electric transmission lines

On February 2, 2018, the Mexican Ministry of Energy (“SENER”) issued the bidding guidelines for the first international public bid for electric transmission lines.

The project consists in the interconnection of the isolated Electric System of Baja California (“BC”) with the National Interconnected Electric System (“SIN”) through the construction of two converter stations and a high voltage direct current transmission line, with an estimated length 1,400 kilometers circuit at a voltage level of ± 500 kV and a transmission capacity of 1,500 MW (“Project”).

Terms

For the implementation of the Project, SENER will use a public-private participation model known as DFBOT (Design, Finance, Build, Operate and Transfer).

The term of the contract will be 30 years, counted from its execution. At the end of the term all the assets will be transferred to the Mexican State.

The minimum percentage of Local Content (Contenido Nacional) that must be met by the winning bidder will be 30%  of the total value of the construction phase of the Project.

Any interested applicant must meet the requirements set in the registration and prequalification stage of the bid. Most relevant requirements relate to financial capability and experience of the participants. For example:

  1.  Registration stage: applicant must prove a minimum stock equity (capital contable) of MX$500 million and prove experience with at least one contract related to investment, construction, operation or maintenance of infrastructure projects in the last 10 (ten) years.
  2. Prequalification stage: applicant must prove a minimum stock equity (capital contable) of MX$6 billion and prove experience with at least five different contracts in the last 10 (ten) years that certify experience similar to the technical conditions of the Project.

The participants must provide a bid guarantee (garantia de seriedad) effective for a term of 180 days in the amount of MX$462.5 million.

The bidding guidelines provide for the incorporation of a private trust, where the contractor will be settlor and the Mexican State will be the beneficiary. All assets, income and obligations of the project and the contractor will be contributed to the trust.

The winner of the tender will be the bidder requesting the lowest constant annual contractual payment (“CACP”). The Energy Regulatory Commission (“CRE”) will include the CACP in the electricity transmission tariff and the National Center for Energy Control (“CENACE”) will pay directly to the contractor, with the resources derived from the transmission rate.

The contractor assumes all the risks of the Project in the stage prior to its commercial operation date.

The contractor shall have the obligation to obtain the rights of way necessary for the development of the Project. The construction phase will commence only until all of the rights of way have been secured. 

Key Dates (2018)

  • Participants registration period starts on February 8 and ends on April 23
  • Initial comments and questions will be submitted between February 12 and July 20
  • Access to the data room with technical information of the Project will be granted between February 12 and August 10
  • Prequalification period starts on May 2 and ends on May 25
  • List with all the prequalified participants will be published on July 27
  • Technical and economic offers must be submitted on August 17
  • Bidding results will be published on November 14 and the contract must be signed no later than November 16

Contacts