Lima Airport Partners To Manage Jorge Chavez International Airport

Lima, Peru - February 14, 2001 With Cabinet Ministers and key business and community leaders in attendance, Lima Airport Partners, SRL signed a 30-year concession contract to develop, manage, and operate the Jorge Chavez International Airport. Lima Airport Partners is a consortium composed of Bechtel Enterprises International, Ltd., Flughafen Frankfurt Main AG, and Cosapi S.A.The Government of Peru selected Lima Airport Partners in November 2000 after an 18-month international bidding process that generated significant interest from numerous airport operators and global developers.

"The government considers this a critical project for the general development of the country," said Javier Silva Ruete, Peru's Minister of the Economy and Finance. "It will greatly expand employment opportunities, create a modern transportation facility to serve as Peru's gateway to the world, and enhance our tourism industry."
Presently, Jorge Chavez International Airport serves 4.5 million passengers per year. Conservative estimates indicate that passenger volumes will more than double by 2010 and reach 16 million by 2020. The latest traffic figures indicate an approximately 11% growth in international traffic in 2000.

"We are ready to help the Peruvian government make Jorge Chavez Airport a world-class aviation center, an engine for regional economic growth, and a showcase for Peru's innovative privatization program," said Peter Henkel, Chairman of Lima Airport Partners.

Lima Airport Partners has developed a comprehensive master plan to improve levels of service in the near term and to create a long-term strategy to enhance revenues through airport commercial development and air cargo growth. During the first three and a half years of the concession, more than US$130 million dollars will be invested in new airport infrastructure, including upgrading the current terminal, constructing a new passenger concourse, expanding and adding new aircraft aprons and taxiways, reconfiguring the existing car parking structure, and creating a hotel and world-class retail center within the airport.

Over the 30-year concession period, Lima Airport Partners plans to finance and build a second runway and a new terminal complex, expand the commercial and retail strategy, and develop new air cargo facilities to support development of other export activities. The total investment in Lima's airport infrastructure is expected to exceed US$1.4 billion during the concession term.

Under the terms of the agreement, Lima Airport Partners will share revenues with the government and will reimburse the government for its costs in the privatization process. Additionally, overall employment at the airport will increase by up to 33%, and the majority of the 150 airport employees now working for the government will be retained.
"The privatization of the operations of the Lima Airport is a major step forward for Peru," according to Pedro-Pablo Kuczynski, President and CEO of The Latin America Enterprise Fund. "Not only will efficiency increase dramatically, but the government will receive very significant concession payments, totaling nearly $425 million over the coming 8 years. The Lima Airport points the way for other concessions, where Peru and its citizens will benefit and foreign investors will bring their expertise and financial resources. An example to be followed!"

About Bechtel Enterprises/Alterra Partners

Bechtel Enterprises is the development, financing, and ownership affiliate of Bechtel Group, Inc., a premier global engineer-constructor. It is a leader in the privatized infrastructure market with interests in the aviation, power generation, transportation, water and wastewater, and telecommunications sectors and is a partner in seven world-class infrastructure development companies. In the last decade alone, Bechtel Enterprises has arranged or participated in more than US$20 billion in project financings. The Bechtel organization has been at the center of airport infrastructure development since the 1970s, providing a full array of planning, design, and program management services. In 1999, Bechtel generated revenues exceeding US$15.1 billion. Bechtel Enterprises recently announced the formation of Alterra Partners, a major initiative to develop, own, and operate privatized airports throughout the world. Alterra is based in London.

About Flughafen Frankfurt Main AG, Fraport AG 

Frankfurt operates Frankfurt International Airport, one of Europe's largest and most successful airports, with 46 million annual passengers and revenues of US$1.3 billion in 1999, and 50 million passengers in 2000. Frankfurt's other private airport development activities include participation in concessions for the new Athens International Airport and new international passenger terminals in Manila and Anatalya, Turkey, as well as a direct ownership stake in Hannover Airport, Germany, which was privatized in 1998.

About Cosapi S.A.

Cosapi, a privately held company, is Peru's leading engineering and construction firm, with extensive experience in the construction of mining, petrochemical, and infrastructure projects in Peru, Chile, and Venezuela. In addition to its participation in the JCIA concession, Cosapi also has an ownership stake in the El Chillón Water Treatment BOT project.