Javier Milei’s government advances with the privatization of road corridors

The government of Javier Milei announced that next week it will begin bidding process for important road corridors in order to privatize themin his search for reduce public spending. This plan contemplates concession strategic routes for Mercosur tradestarting with the routes 12 and 14which connect Buenos Aires, Entre Ríos, Santa Fe and Corrientes.

Currently, these corridors are under the management of Paths of the Uruguay River (CRUSA), whose contract expires on April 9. The company filed a claim with the National State for US$300 million, arguing contractual breaches and delays in adjustments rates. In the midst of this conflict, CRUSA proposed extend your concession in exchange for withdrawing the lawsuit, including an increase in the toll in Zarate of approximately 140%.

However, it was confirmed existence of other proposals to take charge of the routes, including that of a consortium made up of three construction companies that project an investment close to the US$600 million.

New tenders underway

The Government’s plan is not limited to routes 12 and 14. It is alsoThe concession of more than 8,000 kilometers in various provinces is plannedincluding the National Route 33 in Santa Fe, the 18 in Entre Ríos and the 19 in Córdoba. This movement means a resounding change in the management of road corridors.

The bidding scheme will establish clear requirements for future concessionaires, and obligations include repair of potholes, shoulders, horizontal and vertical signageand lighting. Only after meeting these conditions will they be able to implement the new toll rates.

The privatization program is part of a broader objective to, supposedly, lighten the tax burden. According to the ruling party’s own estimates, more than US$5,000 million within a period of 20 years thanks to these concessions.

Furthermore, the Government reduced its investment in provincial and municipal public workstransferring these responsibilities to local administrations. Until September, the state company Corredores Viales accumulated a debt close to $16 billionwhich generates a certain need to attract private investment to maintain and improve road infrastructure.

The objectives of the concession model

Of the 40,000 kilometers of national routes, the construction companies estimate that only about 1,000 kilometers They can generate sustainable income through pesos. These sections include the accesses to the City of Buenos AiresCórdoba and Route 3, which poses a challenge to expand the model to other regions of the country.

With this plan, the Government aims to balance the maintenance needs of the road network with the aim of relieving pressure on public accounts, while private companies evaluate the opportunities and challenges of operating under a concession scheme in the current context.