The public works ministry (MOP) of Chile is seeking another bidder to concession the $265m La Serena-Vallenar stretch on north-south highway Ruta 5 after the Spanish consortium Azvi-Copasa failed to set up a company to operate it by the 2 November deadline.

In October, Azvi-Copasa said it does not have funds to go ahead with the concession saying a study carried out by its financial advisor Scotiabank cited a 27% increase in the highway’s projected cost.

The 187km highway concession contract was awarded to the Spanish consortium in November last year.

The Chilean ministry is planning to choose an operator from the remaining bidders – Consortium Ruta Elqui-Huasco, OHL Concesiones, Consorcio Vial Chile and Sacyr Concesiones Chile.

The ministry will collect guarantee money worth $10m from the company, which it plans to use for the conservation and improvement of public infrastructure.

The project will link northern region IV capital La Serena with region III city Vallenar and is expected to begin in first quarter of 2012, according to