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CREMA CONTRACTS

No more delays. Crema Contracts are being used in Uruguay.


Uruguay starts public construction of railway and roadways for UPM 2, as part of the required infrastructure.


The news is that some of the contracts settled by the Uruguayan government for roadways construction are using the modality known as “CREMA CONTRACTS” where the Construction Company must present and execute the construction project in a period of no more than 2 years. After the 2-year period the government starts to pay its share which is 70% of the total budget and for a period of 10 years the Construction Company is responsible for the maintenance. Adding up to 12 years of responsibility when the government finishes paying.


Last September, in Parliament, the country’s Ministry of Transport and Public Works announced a total infrastructure investment of 2.457 million dollars including the construction contracts already approved by the previous administration under the modality of PPP Public and Private Participation. A system that implies that the private construction company who has won an infrastructure contract, has to have beforehand the total budget required and be in charge of maintenance for a period of 20 years. The Government starts paying after the work is completed and operating, in long term down payments.


That’s why the modality CREMA, as reps form the Ministry of Transport and Public Work sustains, proves to be more effective and fast, avoiding delays and also assures that the Construction company will use top technology and materials to get the job done. Already construction in National Uruguayan roadways are being built due to the delay regarding the construction of the railway which will not be ready to use until 2023.


It may seem that CREMA CONTRACTS are a new and innovative modality in the region, but data proves that countries such as Argentina, Peru, Colombia and even Uruguay has already invested in infrastructure using this type of contracts, also known as “Performance Contracts” back in the 90s with the need to construct 359 kilometers of national roadways and the capital Montevideo, in 1996 with the citys main urban roadways.


UPM 2 is the second pulp mill build by the Finnish Biofore Company in Uruguay and the third pulp mill in the country. The Company plans to start production in the second half of 2022, and the current Uruguayan government is investing in vial infrastructure.

Construction in roadways and a whole new railway line are well on its way so as to permit transportation of pulp from the pulp mill to the capitals port.


With an annual production of 2. 1 million tones, the mill will increase UPMs pulp capacity by more than 50 %.


This is good news for private capitals and companies interested in taking part of the industrial developing process and big welcome to invest in the country.


Further information can be found in the links below in Reference articles and documents consulted.









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