Argentinian government creates trust to finance US$8 billion road PPP projects
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The Government of Argentina has announced that it is creating a trust to ensure the start of construction of six road corridors in late October and early November. The corridors form the first stage of the Ministry of Transport's Network of Highways and Safe Routes PPP project and require an estimated total investment of around US$8 billion.
Concession contracts to design, construct, expand, improve, repair, remodel, operate, maintain and commercially exploit the road corridors were awarded and signed earlier this year. The five concessionaires will convert selected roads across Argentina into highways, semi-highways and safe routes.
Highways will have two 3.65m lanes each way, a 1.8m hard shoulder and a central reservation. Safe routes will have one 3.65m lane each way, a 1.8m hard shoulder and a third 3.65m lane alternating sides.
Altogether, this stage entails the construction of 813km of new highways, 1,494km of safe routes and 17 new connecting roads to different municipalities, plus additional works on 252km of road. The roads included in the six corridors are located in the provinces of Buenos Aires, Córdoba, La Pampa, Mendoza and Santa Fe.
The government's trust will act as an intermediary between the financial sector and the construction companies, allowing the latter to access loans necessary for the works planned for the first year of their respective contracts. Across all six concessions, this first year of construction is estimated to cost US$1.2 billion.
The first contribution to the trust is being made by Banco de la Nación Argentina. The national bank has agreed to provide between US$200 and 300 million.
More broadly, the creation of the trust is intended to increase the pace and transparency of public works, and to guarantee that works are completed within the established deadlines.
Tenders for the other two stages of the Network of Highways and Safe Routes are due to be launched this year, with all of the roads within the network scheduled to be in operation in five years.
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