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Source: Lima Airport Partners Source: Lima Airport Partners

Mexico’s decision to cancel a $13 billion airport has made investors hungrier to participate in the expansion of Peru’s main air terminus, according to the project’s director.

Anton Aramayo, who is overseeing the plans at Lima Airport Partners, said dozens of international companies are interested in bidding for around $1.2 billion of works to build a second runway and a new passenger terminal.

One of the few airport projects going ahead in South America at present, the Lima-based unit of Frankfurt airport operator Fraport AG has sparked interest from Bechtel Group Inc, China Harbour Engineering Co. Ltd, and Ferrovial SA and other infrastructure giants. Los Angeles-based Aecom is overseeing the airport’s design.

The cancellation of Mexico’s giant Texcoco airport last year helps to explain the interest. Aramayo says strong demand for engineering contracts could help drive down the overall cost of the airport’s expansion, which is currently estimated at about $1.5 billion, he said.

“The international interest has been gigantic,” Aramayo said by phone from Lima.

The project is long overdue. The Jorge Chavez International Airport will handle more than 23 million passengers this year, up from roughly 10 million a decade ago.

The expansion was held up for more than a decade by delays in expropriating the 600 hectares needed to build a second runway. A breakthrough came in 2017 and construction work began in earnest this month to prepare the ground for the new runway and traffic control tower. Spain’s Obrascon Huarte Lain SA and Peru’s Cosapi SA won the contract for earth-moving works.

Construction at Jorge Chávez International Airport. Source: Lima Airport Partners

The new terminal will be able to handle 35 million passengers when completed in 2024. Its design will facilitate a subsequent expansion that will increase capacity to 50 million in 2041.

Years of fast economic growth and surging tourist arrivals have pushed the airport to its limit. Peru has doubled the number of tourist arrivals in the last decade to 4.4 million last year, with more than half arriving via the Jorge Chavez airport. The country is now the only major economy in South America whose main airport relies on a single runway.

The second runway and additional hangars will allow the airport to double the number of flights and leave it well positioned to become a South American hub in 2024, Aramayo said. Santiago-based Latam Airlines Group SA already uses Lima as its hub.