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Asian firms seek to shake up Chilean infrastructure: official
[SANTIAGO] Asian companies are eyeing Chile's hot infrastructure sector, which has traditionally been dominated by domestic and European companies, the country's concessions director said in an interview on Tuesday.
Chile's concessions unit has over US$2 billion of tenders scheduled to be published by the end of the year and its director, Eduardo Abedrapo, told Reuters a US$600 million tender for Chile's Route 66, known as "The Fruit Highway," will be published in the coming weeks.
Chile, like neighboring Argentina, is trying to attract private investment to improve its ports, roads and airports, and two major candidates in November's presidential election have also pledged to dramatically expand the nation's transport network.
Chinese and Korean firms are demonstrating strong interest, Mr Abedrapo said in his office in downtown Santiago, a novelty in a market dominated by Spanish firms such as Sacyr and Abertis as well as domestic companies. That's despite slowing growth and poor business confidence in the South American nation, which has been battered in recent years by low prices for copper, its main export.
"I've received a lot of Chinese companies, Korean companies, and also Japanese companies that have come to talk with us," Mr Abedrapo said. "Sometimes, there's a certain political and economic pessimism in Chile, and what I see is that investors still see a peaceful country, one that continues being a good place to invest, with clear rules."
Public records show Mr Abedrapo met this year with the China Harbor Engineering Co and the China Gezhouba Group Co, as well as South Korea's SK E&C, Posco E&C, and Hyundai. Last year, he met with the China Three Gorges Corp, as well as a Malaysian investors' group.
Chile's infrastructure scene is also experiencing a shake-up from the arrival of no-frills, low-cost airlines, such as JetSmart, launched this year by US private equity firm Indigo Partners.
While airlines were demanding more amenities at terminals up until a few months ago, Mr Abedrapo said, now the emphasis is on bare-bones arrangements that lower airport fees.
As a result, he said, the government would make future airport contracts more flexible to accommodate both traditional and low-cost carriers.
Mr Abedrapo added that the government is also considering opening tenders for airport contracts in which the winner would be required to spruce up smaller, nearby airports, such as one in the town of Castro, near the southern city of Puerto Montt.