SUSTAINED DRIVE

Peru 2015 | REAL ESTATE & CONSTRUCTION | VIP INTERVIEW

TBY talks to Ruben Lora, President of the Board of Directors at Mota-Engil Peru, on co-financing, state-led development, and the firm's relationship with the government.

Can you talk about the strategy of concessions in Paita and how you meet related challenges?

Paita was one of the concessions that we developed six years ago, having been successful at the tender for the 30-year concession, and we already have five years of experience in managing it. We expect the port to experience growth in the future, and will work to facilitate this under the terms of concession granted to us. Northern Peru has considerable potential, and is of great interest to us.

What is your growth strategy for 2015, especially in terms of infrastructure?

Concessions are a part of our development strategy, but we are not focused on the concession alone, but on the entire project by following a construction scheme. Concessions are a source of secure jobs, but we also work with private initiatives, because government schemes provide the advantage of participation in a co-financing project.

“Concessions are a part of our development strategy."

Is co-financing an important part of your strategy?

Definitely, and we are exploring the market potential of projects available for us to participate in. We have participated in the construction of the Airport of Chincheros in Cusco, but unfortunately we ended up in second place, as another company made a more aggressive offer that was difficult to compete with.

In 2014 the state was working to promote foreign investment. It is true to say that in 2015 there will be more state-led infrastructure investment?

Yes, there are highly ambitious projects at present; a key announcement was recently made regarding the construction of new roads. There is considerable interest in water, and waste disposal works, in which we are not currently participating. In terms of roads and infrastructure, Lima and other large cities require considerable improvement to keep traffic flowing and avoid resource mismanagement, which the government is set to address. Meanwhile, we will be constructing a hospital in Puno that will be financed from state coffers.

Do you expect the economy to improve in 2015?

We are all expecting the country to experience sustainable improvement. 2014 was a complicated year with a number of difficulties, and yet 2015 needs to be one of development, where growth should not register short of 5%.

We have observed mining companies investing again in 2015 and note that you too are working on mining projects. What do you foresee for this sector in 2015?

There are many important projects likely to commence in 2015 that could help the country develop and grow over the coming years. Yet these will depend on the degree of investor confidence in the state. I would also hope to see a continuation of such ongoing project investments as Torromocho with Chinalco, Lagunas Norte with Barrick, and an expansion project with Antamina. We are also working on Las Bambas, which will start production early in 2016.

What is your goal for 2015 in terms of growth and revenue?

Mota-Engil Peru has seen considerable growth over the past five years. Our position for 2015 is to see margins that enable us to sustain our position, without prioritizing sales. We will focus on mining, infrastructure, and certain energy projects, and will develop hydroelectric projects, one of which is due to commence this year, namely our Marañon hydroelectric project, which we will construct.

How would you describe your relationship with the government of Peru in terms of investment and bureaucracy when compared with other countries in the region?

We are not particularly dependent on public projects; the paperwork can be complicated, although we have not actually experienced much difficulty to date. The public sector in Peru is active and does provide scope for development, and yet this is even more so the case for the private sector, which we rely on to a greater extent.

© The Business Year - February 2015