Tangible Progress On Transport Concessions

Following delays in the tendering process, the government's fourth generation concessions ('4G') package is finally moving forward. The National Infrastructure Agency (ANI) announced that it has received 22 expressions of interest for a US$718m road concession in the north of the country. With a total of 62 companies interested in the project, the number is unprecedented. This indicates that confidence in the market has returned, boosting the country's appeal to investors.

The project is divided in two parts. The first 110km connect Cartagena and Barranquilla, passing through seven municipalities. The following 36.7km is a bypass named Circunvalar de la Prosperidad. The project encompasses the rehabilitation, construction, expansion and maintenance of a total of 146.7km of roads. Having received the expressions of interest, the government plans to release a list of 10 prequalified bidders in the second half of the year, while the final decision is expected to be announced in early 2014. This project will benefit trade and tourism in the Colombian Caribbean region, connecting the two main cities - Cartagena and Barranquilla - to the ports and the free trade zones. It will also make exports more competitive as travelling times fall and so do transport costs.

According to ANI's president Luis Fernando Andrade, this fourth wave of concessions represents the largest investment programme that Colombia has seen to date in terms of public infrastructure. Priority has been given to transport with the aim of connecting the country's vast territory - this should provide the required infrastructure for the country to reap the benefits of the growing mining industry and the recently signed free trade agreements. The government's 4G concessions package is worth US$ 23.2bn (COP43.9bn) and it includes more than 30 concessions to improve roads, airports and ports infrastructure.

Stable Growth To Follow
Transport Industry Value Real Growth, % y-o-y

Corruption has been one of the main reasons for the tendering delays. However, the government has shown strong determination to overcome this obstacle. Delays are partly explained by the creation of ANI to replace Inco, which was involved in alleged corruption scandals. In order to guarantee transparency and efficiency the government has started to implement special measures such as the OECD Transparency Mechanism, which is being used for the first time in the procurement of this contract. This mechanism identifies the stages in the process that are vulnerable to acts of corruption and suggests timely measures to correct them.

This article is tagged to:
Sector: Infrastructure
Geography: Colombia

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