--Local and international companies submit bids for nearly $5
billion in projects to build two hydropower dams
--Bidders include companies from Brazil, China, France, Korea
and Spain
--The dams will generate 1,740MW and enough electricity so Santa
Cruz province can export it to the rest of Argentina and
potentially even bordering countries
(Adds commentary and background throughout.)
By Taos Turner and Shane Romig
BUENOS AIRES--More than 20 companies, including firms from
Brazil and China, have submitted bids to build two hydroelectric
dams in Argentina, part of a nearly $5 billion project aimed at
generating more electricity for local industry and potentially for
export.
The dams, which will take more than five years to build, will be
in the southern province of Santa Cruz and could vitalize the
southern half of Argentina, providing power to some areas for the
first time.
Argentina's government will pick the winning bids in 60 days and
sign contracts a month later, Planning Minister Julio De Vido said
Wednesday. He said construction will begin by June.
The dams will generate 1,740 megawatts of electricity,
accounting for about 10% of total national demand for electricity,
Mr. De Vido said. He called on mayors and politicians in Santa Cruz
and surrounding provinces to come up with plans to attract
businesses and manufacturers to the region, saying the new power
could fuel industrial growth.
"This will change the destiny not only of Santa Cruz but also of
the region," Mr. De Vido said. "We will see a true revolution in
terms of employment and economic activity in the region and we have
to be ready for it."
A key aspect of the plan is a related project that will connect
Santa Cruz and other areas to the national power grid. In an
interview Wednesday, Santa Cruz Lieutenant Governor Fernando
Cotillo said the damns wouldn't make any sense if they weren't
connected to the rest of the country.
"Santa Cruz is going to become a producer and exporter of
energy. With these two dams, we'll have an energy surplus and a
competitive advantage for companies that want to come to Santa
Cruz," Mr. Cotillo said. "This is strategically important. We'll be
able to generate energy and transport it to other areas, including
Buenos Aires and even Brazil and Chile."
By building the dams, Argentina will also be able to reduce the
need to import diesel and liquefied natural gas, saving the
government $1.1 billion annually, Mr. De Vido said.
In 2011, Argentina's energy import bill totaled $9.4 billion,
straining the federal budget. Indeed, Argentine President Cristina
Kirchner has said the import bill was so onerous that it forced the
government last year to expropriate the oil and gas company YPF SA
(YPFD.BA, YPF) from Spain's Repsol SA (REP.MC) in a bid to produce
more energy.
Mr. De Vido said the companies bidding had agreed to find
financing for at least 50% of the value of the project, cutting in
half the government's need to finance the dams itself.
The companies, which also include bidders from Argentina,
France, Korea and Spain, submitted bids though five international
consortia. International bidders were required to ensure that least
30% of the construction components are made in Argentina, Mr. De
Vido said.
Bidders included China Gezhouba Group Corp. (600068.SH) in
tandem with Argentina's Electroingenieria SA; Brazil's Odebrecht SA
together with Argentina's Industrias Metalurgicas Pescarmona SA, or
Impsa; Brazil's OAS SA with Hyundai Engineering and Construction
Co. Ltd (000720.SE) and Argentina's Sociedad Comercial del Plata
(COME.BA); Argentina's Helport SA from the Eurnekian family group
together with Spain's Isolux Corsan; and China's Sinohydro Corp. in
tandem with Argentina's IECSA SA, Mr. De Vido said.
France's Alstom SA (ALO.FR) is also participating.
Hydroelectric dams currently account for almost 30% of the power
generated in Argentina.
The dam projects, first announced in 2008 and repeatedly
delayed, will be named after two former Santa Cruz governors,
including Argentine President Cristina Kirchner's late husband and
predecessor in office, Nestor Kirchner.
"This is a dream come true for the people of Santa Cruz, not
just because of the economic growth it will bring but because of
the energy it will allow us to export," Santa Cruz Congresswomen
Stella Garcia said in an interview.
Write to Taos Turner at taos.turner@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires