Public-Private Partnerships for highways in Mexico General Directorate of Road Development
Current situation road infrastructure Public resources that the federal government in recent years has aimed at the development of road infrastructure budgets have allowed major This investment is intended to maintenance programs, modernization and construction of roads by the Ministry of Communication and Transportation (SCT) In addition, the Scheme of Public-Private Partnerships has helped to finance new highways SCT has put together three public-private partnership models that seek to attract private capitals to highway investments The three models are: Highway concessions Private service contracts (PPP) Asset Utilization
Goals road infrastructure GOALS Through its public-private partnership scheme SCT seeks! Development road system Increase the amount of investment Add value to services Increase the efficiency and productivity of public service Better distribute and manage highway project risks Create new opportunities for the private sector Optimize operation and maintenance of toll roads GROWTH
Concessions Model Public-Private Partnerships Scheme FOR HIGHWAYS IN MEXICO
Main Characteristics Concessions Model Concessions granted through public bids SCT provides final designs and rights of way SCT sets maximum average tolls and the rule for updating them The time of concession can be the maximum allowed by law (thirty years) The government provides an initial contribution of public funds paid through National Infrastructure Fund (FNI), a trust in Banobras, a public development bank The concession is awarded to the bidder who requests the lowest amount of public funds, measured as the sum of the initial contribution and the net present value of the minimum revenue guarantee
Main Characteristics Concessions Model The government offers a minimum revenue guarantee to facilitate involvement by private banks When projects do not require public funds, the concession is awarded to the bidder who complies with the legal, technical and financial requirements of the bid and offers the largest monetary amount to SCT Risk-sharing on issues of fortuitous events and force majeure through insurance and a contingency fund established by FNI Ability to compensate the concessionaire invested capital in case of early termination of the concession for reasons attributable to the concessionaire The current status,... Under this model have been granted 18 concessions with a length of 1,306 kilometers
Private Service Contracts Model (ppp) Public-Private Partnerships Scheme FOR HIGHWAYS IN MEXICO
Main Characteristics PPP Model A concession is awarded through a public bidding process which also grants to the concessionaire the exclusive right to sign the service contract The duration of the service contract is fixed, from 15 to 30 years The contract establishes an association between the SCT and a private firm to design, finance, build, maintain and operate a road The private firm provides services in exchange for periodic payments Periodic payments are based on availability of the road and its traffic levels
Main Characteristics PPP Model Each bidder requests a periodic payment determined as a function of: Construction, maintenance and operating costs Rate of return on equity, including financial costs Estimated annual traffic Duration of contract The Net Present Value of periodic payments is the decision criterion used to award the concession, provided that the winner complies with technical, legal and financial requirements After construction, the modernized road continues operation as a toll-free road When the model is applied to a toll road, the periodic payment is made with a combination of toll revenues and budgetary funds The current status,... Under this model have been granted 7 concessions with a length of 605 kilometers
Asset Utilization Model Public-Private Partnerships Scheme FOR HIGHWAYS IN MEXICO
Main Characteristics Asset Utilization Model The model considers the utilization of 23 highways of the Fonadin network to support construction of 2,193.5 km of new roads, according to the following: SCT designs packages composed by existing toll roads in the Fonadin network and roads to be built by the winning bidder SCT organizes public bids to transfer these packages to the private sector and obtains resources to pay outstanding debts The winning bidder operates and maintains existing roads and builds, operates, and maintains the new roads in the package The concessionaire is responsible to operate, maintain and operate the assets in question and then build and operate new highways that are part of the package The current status,... Under this model have been granted 3 packages with a length of 1,200 kilometers
Progress and Achievements Public-Private Partnerships Scheme FOR HIGHWAYS IN MEXICO
Awarded Concessions Concessions Model Matehuala Bypass Mexicali Bypass Morelia-Salamanca Tepic-Villa Unión Tecpan Bypass Amozoc-Perote and Perote Bypass Northern Bypass of Mexico City Saltillo-Monterrey and Saltillo Bypass Arriaga-Ocozocoautla Reynosa-McAllen Anzaldúas International Bridge San Luís Río Colorado II International Bridge Río Bravo-Donna International Bridge Perote-Banderilla and Xalapa Bypass Irapuato Bypass Chihuahua Bypass Barranca Larga-Ventanilla La Piedad Bypass and Access to Mexico-Guadalajara Highway Salamanca-Leon PPP Model Irapuato-La Piedad Querétaro-Irapuato Tapachula-Talismán with branch to Ciudad Hidalgo Nuevo Necaxa-Tihuatlán Rioverde-Ciudad Valles Nueva Italia-Apatzingán Mitla-Junction Tehuantepec Asset Utilization Model North Pacific (1 asset and 2 projects to development) Centre-West (4 assets and 4 projects to development) South Pacific (1 asset and 2 projects to development) 18 concessions, 7 ppp and 3 asset utilization 28 awarded concessions investment of 6,819 million US dollars and 3,112 kilometers!
Awarded Concessions 28 concessions, 3,112 km and 6,819.6 million US dollars CONCEPT CONCESSIONS PPP ASSET UTILIZATION TOTAL awarded 18 7 3 28 kilometers 1,306.7 605.1 1,200.9 3,112.7 investment (million US dollars) 3,131.4 2,705.3 983.0 6,819.6 The offered in asset utilization has been of 4,133.7 million US dollars!
Bid in Progress Public-Private Partnerships Scheme FOR HIGHWAYS IN MEXICO
1 package is bid in progress with investment of 443.2 million US dollars and 417.5 kilometers! Bid in Progress Projects 1 asset utilization Asset Utilization Model Michoacán Package o Pátzcuaro -Uruapan-Lázaro Cárdenas Highway, o Project Morelia Bypass, o Project Uruapan Bypass, and o Modernization Pátzcuaro -Uruapan
Bid in Progress Projects 1 bid in progress, 417 kilometers and 443 million US dollars CONCEPTO CONCESSIONS PPP ASSET UTILIZATION TOTAL bid in progress -- -- 1 1 kilometers -- -- 417.5 417.5 Investment (million US dollars) -- -- 443.2 443.2
Bid in Progress Projects asset utilization model Package MICHOACÁN Pátzcuaro-Uruapan-Lázaro Cárdenas Highway of 272.2 km, Construction of Morelia Bypass of 64.1 km and 182.4 million US dollars, Construction of Uruapan Bypass 25.2 km and 92.8 million US dollars Modernization Pátzcuaro-Uruapan of 56 km and 168.0 million US dollars
Conclusions Public-private partnerships are key to increase highway infrastructure investment levels in Mexico The success of these partnerships is critical rigorous preparation and implementation of projects SCT is convinced of the strategic importance of these schemes and invites interested to maintain a dialogue on these
GENERAL DIRECTORATE OF ROAD DEVELOPMENT www.sct.gob.mx/en/road-infrastructure/general-directorate-of-road-development/