BUILD IT STRONGER

Peru 2017 | CONSTRUCTION & REAL ESTATE | INTERVIEW

TBY talks to Ernesto Tejeda Moscoso, President of OBRAINSA, on ways to boost construction activity in Peru, the need for high construction standards, and upcoming projects.

Ernesto Tejeda Moscoso
BIOGRAPHY
Ernesto Tejeda Moscoso has over 35 years of experience in the construction sector. He has been Chairman of OBRAINSA since 2010, Chairman of Jayanca Agricultural Negotiation since 2011, and CEMSA (Miraflores Concession Parking) since 2012. He has also been Chairman of the Infrastructure Committee of CAPECO and Director of CONFIEP representing CAPECO. He holds a degree in civil engineering from Ricardo Palma University.

What are the latest trends characterizing the construction sector in Peru?

In general, opening Peru's economy to privately financed concessions has been instrumental to the country's growth. The maturation of an infrastructure project—especially for concessions—has to be analyzed with a medium-term perspective. The infrastructure deficit is high and both the state and private sector are making serious efforts to meet the demand. The housing segment is more sensitive, however, and much depends on volatile factors such as access to credit, as banks may change their policies. For example, the housing deficit in Peru comes from the lower social class, despite the promotion funds such as MIVIVIENDA, which in practice favors the middle class. This fund has to be reformulated to benefit Peru's broader housing needs. The country is only building 40,000-60,000 homes a year, and compared to the rate of building in Chile or Colombia, we should be building over 120,000. It is a clear change of policies is necessary to boost this segment.

How would you describe the quality of the existing infrastructure realized so far in Peru?

Structural engineering is required to comply with international quality standards—it is not possible to build structures at a lower standard, especially in a seismic country like Peru, where all structures must be earthquake-resistant. National and private companies in Peru comply with the American Society for Testing and Materials (ASTM) standards and regulations, and all contracts are required to comply with Peruvian construction standards, which are based on international ones. We have always handled projects at the highest standard, not just in terms of quality of the products but in the operations of the company, attention to environmental regulations, and also to ISO regulations. The company has made a USD5 million investment over recent years toward technology.

What have been the most iconic projects executed by OBRAINSA?

In the last 10 years, the company has had a great leadership, working wherever the demand for infrastructure was greatest, particularly with roads—we have built over 5,000km of new asphalt roads. This country has three disparate regions, especially in the mountains and jungles, so we created a program called “Proyecto Peru" for the basic paving of roads. There are two main ways Peru's road issues need to be resolved. National roads involve an investment of nearly USD2 million per km, which is a large investment because of the challenging geographical features of Peru, and these last more than 20 years. Peru also has over 75,000km of secondary roads that need to be improved with basic asphalt and maintenance every five years. We have worked in Panamericana Sur in three different contracts and completed almost 3km of missing road between Arequipa and Ilo (Moquegua) that traverses the mountains, and took years to be completed. We have a presence in all of Peru's regions. We are currently working on a road in the north of Peru near the Condor Mountain range border with Ecuador. In infrastructure, we worked on the Pillones Dam in Arequipa, which we designed and built and it is one of the most important dams made in the recent years. The dam helped increase the energy production of the hydroelectric plant Charcani V, and supplied Cerro Verde with more water for its production. In the last three years, the company has decided to diversify its activity in all the areas of construction, focusing on infrastructure, construction, and various civil works. All three business units were successful over 2015, and we expect stability for this year and even for 2017. We are the builders and dealers for the concession of the Miraflores underground parking structure, we started the construction of a building for SUNAT, we are working on construction for Cayetano Heredia University and are building hospitals in Cajamarca and Huanuco. We are also working on an aqueduct in Ilo (Moquegua) that is part of an irrigation project and are building a 70km aqueduct between the highest point in Moquegua and the coast.