On 29 June 2018 government entity Telecomunicaciones de México (TELECOMM) issued a call inviting applicants to compete in the bidding for the Red Troncal project (ie, the National Backbone Network), which has been in the works since the 2013 constitutional telecoms reform. The winning party (the developer) will enter into a public-private partnership (PPP) for the:
- design, financing, installation, deployment, operation, strengthening, maintenance and development of the network; and
- the provision of wholesale telecoms services.
The notice invites all legal persons, both foreign and domestic, that fulfil the bidding requirements, rules and provisions set out in the document to bid for the project.
TELECOMM will carry out the bidding process under the federal PPP Law and enter into a PPP agreement with the developer.
Further, TELECOMM will support the project by granting the developer:
- the right to unrestricted, irrevocable and exclusive use of two pairs of dark fibre strands from the Federal Electricity Commission's (CFE's) electric utility network;
- access to demarcation and connection points; and
- other rights provided in the use or maintenance contract signed by TELECOMM and the CFE.
The developer will assume all costs and expenses, as well as any obligations, under the TELECOMM and CFE contracts. It will also cover the costs of building any additional required infrastructure not provided by TELECOMM and will be responsible for obtaining any necessary authorisations or licences.
The bidding call also details the winners' many obligations associated with the proper and timely deployment of the National Backbone Network. The contract term (ie, the original length plus its only possible extension) cannot exceed 40 years. The initial deployment date must be within the first 270 days of the contract's signing.
In order to participate, potential bidders must acquire the bidding rules. A detailed timeline envisages that the PPP contract will be finalised by the end of November 2018. The bidding rules provide:
- the terms and conditions in which the proposals will be evaluated; and
- the process to determine the auction winner based on the percentage of area covered, which will be more than 80% of the population.
The private sector is expected to show interest in this project, which will be the last project to be implemented by the current administration. The new left-wing government will take office on 1 December 2018.
For further information on this topic please contact Federico Hernández Arroyo at Hogan Lovells BSTL by telephone (+52 55 5091 0000) or email ([email protected]). The Hogan Lovells website can be accessed at www.hoganlovells.com.
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