In 2001, Odebrecht Peru had 460 members and a backlog worth USD 3.1 million. But by the end of 2009, the number of company members had soared to 8,000 and its backlog had surpassed USD 520 million. The projection for earnings in 2011 is in excess of USD 1 billion.

According to Jorge Barata, the CEO of Odebrecht Peru, this growth reflects the economic boom underway in that Andean country. “These developments have more to do with Peru than Odebrecht. This phenomenon has taken place continuously since 2002. The country’s economy has always grown more than 6% per year, which fuels the growth of companies that are committed to this country’s development.”

One of the busiest sectors is the port industry, where Odebrecht has won three contracts in recent years. The Port of Melchorita is now exporting natural gas through Peru LNG, and Odebrecht will deliver the South Mole in the Port of Callao in the second half of 2010, under contract to Dubai Ports World (DP World). The company is also building the Port of Bayóvar for CVRD, so the Brazilian mining giant can use that facility to ship out its phosphate production, which is used to make fertilizers. These private-sector projects have made Odebrecht Peru the first choice of a wide range of clients. “Today we are highly competitive in the area of port construction, thanks to our outstanding technology and logistics, as well as our capacity to groom a skilled workforce. Eight other ports could potentially be built, and we are keeping a close eye on that process,” explains Jorge Barata.

In Bayóvar, northern Peru, the biggest challenges were building an access bridge and the port itself using perforated concrete piles, installing the electromechanical structures that convey phosphate to the port, and the tight deadline: just 16 months. “Working with CVRD is always a challenge because they are a highly demanding client. Furthermore, CVRD is an important ally for Odebrecht in Brazil and worldwide, which redoubles our responsibility,” says Project Manager Allan Abrantes.

Concessions
In addition to the three port projects, Odebrecht Peru’s teams are hard at work on the final stages of three highways. Two of them are part of the IIRSA (Initiative for South American Regional Infrastructure Integration) Program, which will increase the integration of Brazil and Peru. Both 25-year concessions, the IIRSA South and North routes are priority projects for the country’s growth. “In recent years, Peru has built a large number of roads, breaking all records, because it needs a highway system to sell its products at competitive prices,” observes Jorge Barata.

Also in the field of concessions, Odebrecht is facing one of the biggest challenges in all its 30 years of experience in that country: the Trasvase Olmos Project. The diversion of the Huancabamba River to the Olmos will take water from a region blessed with greater rainfall to a 43,000-hectare area of desert and benefit thousands of people. The company’s teams are using a TBM (Tunnel Boring Machine) to dig a 20-km tunnel through the rock formations of the Andes, which tower as high as 2,000 m. When the last 4 km have been excavated, Concessionária Trasvase Olmos will transport 400 million cu.m of water per year.

Once that phase has been completed, the Olmos Project will involve two other components: irrigation and hydroelectric power generation (the tender for the latter has not been scheduled). Through Concessionária H2Olmos, Odebrecht has tendered a bid to irrigate a vast area. The company will finance the entire project. Land now belonging to the government will be auctioned off, and lots covering a minimum of 1,000 hectares of land will be sold to large companies, totaling 38,000 ha in all.

“Odebrecht’s growth reflects the boom underway in Peru”
Jorge Barata

Another 5000 ha will be allocated to social programs, benefiting small farmers like Segundo Benítez. A villager in Casario del Muerto, he belongs to a fruit-growing cooperative and needs water to irrigate his crops, but now it is only available in artesian wells. “With water from the Olmos Project, this cooperative can grow,” explains Benítez, the father of five.

“The main benefit of the irrigation component will be directly creating 76,000 jobs,” observes Olmos Project Director Maurício Cruz. “It will also form a strong supply chain, indirectly creating even more work opportunities. This region will probably achieve full employment, similar to what happened in the Trujillo region, where we built another irrigation project called Chavimochic,” he adds.

Odebrecht’s projects in Peru


First project in the capital
Odebrecht Peru is also breaking ground for more new projects, in addition to the irrigation component of Olmos. One is the Electric Train, which began 20 years ago under the responsibility of another firm, and will be completed by a joint venture formed by Odebrecht and Graña y Montero. In addition to modernizing the 9-km electromechanical system already in place, the joint-venture contractor is building another 12-km section in Lima. “This is a new experience for Odebrecht, because it is our first project in the capital. It is also a priority, because traffic and mass transportation in Lima require new solutions. Our biggest challenge is to complete the Electric Train project in 18 months, when it would usually take 36 months,” explains Project Director Carlos Nostre.

Another project that will begin this year is a Public-Private Partnership, the Chaglla hydroelectric plant, which will have a generating capacity of 460 MW. Located in central Peru, it will go online by July 2015. Odebrecht also has its eye on another six hydropower projects and is studying the 1,085-km South Andean Pipeline works. “The market requires it. Plus, we are studying the mining sector, which involves a USD 20-billion investment, and water and sewer projects in partnership with Foz do Brasil, as well as opportunities to work on irrigation and road projects. Our strategy is to build up an increasingly diverse and significant range of projects,” says Jorge Barata.