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 Business News | May 2005 
Nation To Upgrade Highway System
 Wire services
| | The Tepic-Villa Union highway will attract 3,000 vehicles per day and save motorists 80 minutes from the current highway. |
The government and private companies will spend 84 billion pesos (US7.7 billion) to upgrade and build highways this year as the nation tries to make up for more than two decades of underinvestment, Transportation Minister Pedro Cerisola said.
The spending, of which about half this year will be on toll roads, is part of a plan to upgrade 90 percent of the nation's principal highways during the six-year administration of President Vicente Fox, which began in December 2000, Cerisola said in a press conference in Mexico City on Wednesday.
"We only had six years so we sought out several new schemes in which the private sector could participate directly," Cerisola said in an event to award Grupo Financiero Inbursa a 30-year concession it won on March 1 to build and operate a toll highway.
The government began to bid out highway concessions to companies last year after most private toll roads built in the early 1990s went bust following a peso devaluation a decade ago, forcing the government to take control of them over in August 1997.
Inbursa beat out three other bidders to win the concession to operate a 148-mile highway from the cities of Tepic to Villa Union, a town near the beach resort of Mazatlan. Inbursa will spend 2.56 billion pesos to build 82 miles of the highway by November 2006 and pay the government 1.61 billion pesos to operate the project.
Companies controlled by billionaire Carlos Slim have already created a construction company and a company to fund projects to take advantage of an expected increase in infrastructure spending, said Marco Antonio Slim, the chairman of Inbursa and Carlos Slim's son.
"With a lot of interest, we'll continue participating in other projects in the highway plan," Slim said at the news conference.
The Tepic-Villa Union highway will attract 3,000 vehicles per day and save motorists 80 minutes from the current highway, said Jorge Fernández, the deputy transportation secretary in charge of highways.
Inbursa's bid calls for a return on invested capital of 16.7 percent and earnings on the construction of the highway of 25 percent, both of which were lower than the three other bidders, Fernández said. Fernández declined to give the expected cost of tolls for the highway. |
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