‘Road concessions are the route of progress’: CCI – Economy

Although the contribution for valuation, mentioned in recent days, can complement the provision of resources for infrastructure in the future, it also It is true that the toll-concession model (without which the country had to promote fiscal efforts close to 100 billion pesos) should maintain and even expand its successful march in Colombia. It has been exalted by multilateral banks as a benchmark of success in the world. Let’s see this reality.

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In the early 1990s, specifically in 1991, after the promulgation of Law 1 —which opened the floodgates to private capital for infrastructure development— the industry began to experience an unprecedented transformation.

The first step was the revolt that the port sector had for the better: the management of the maritime terminals (in those days headed by the infamous Colpuertos) passed, precisely, in the early 1990s, into the hands of the private sector.

From that moment on, the way was paved for the PPP model (public-private partnerships) to expand successfully, in addition, to highway and airport modes.

Without the concessions, the treasury would not have had sufficient capacity to financially support the works that, thanks to the PPP model, have changed dozens of ports, airports and roads for the better. Many of them, with world-class attributes. Nor would it have been possible to increase the gross domestic product of infrastructure, as the multilateral banks have done since the 1990s.

Regarding ports, the first thing to take into account is that, of the 183 facilities attached to Colombian port companies, currently 105 belong to the private regime. Now, The concessioned ports, in fact, have shown that they have sufficient capacity to face, in great detail, the challenges derived from the expansion of the Panama Canal and the advent of new technologies in the design of deep-draft vessels.

This is evidenced by the proven and recognized efficiency of the port terminals, for example, in Santa Marta, Barranquilla, Buenaventura or Cartagena. The latter was the terminal, during 2020 and 2021, with the highest container movement in Latin America, in light of ECLAC. It was also ranked number one in the Americas and number 12 globally, in the World Bank’s World Bank Container Port Performance Index.

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In airport infrastructure, six concessions are in charge of the administration, modernization, operation, maintenance and, in some cases, the expansion of 16 airports throughout the country. Among these are: El Dorado (Bogotá), deserving of the Skytrax distinction as the best in South America; Ernesto Cortissoz (Barranquilla); Rafael Núñez (Cartagena), Alfonso Bonilla Aragón Cali); José María Córdova (Rionegro); El Caraño (Quibdo); Camilo Daza (Cúcuta), among others.

Among the most relevant achievements of the concessioned airport infrastructure are: the improvement of service levels with the implementation of the different operating and passenger processing subsystems, in accordance with international standards, greater operational security, higher connectivity rates, modernization and airport equipment to provide a better service. In addition, the Oaci (International Civil Aviation Organization) certification of the airports of Cartagena, Cali, Cúcuta, Bucaramanga and Barranquilla was fulfilled.

It is worth noting that air passenger traffic during the last 30 years of determined evolution, went from 8 million passengers in 1992 to 52 million in 2022.

In what has to do with the highway mode, the inventory of works resulting from PPPs is eloquent. Due to the model, it has been possible to intervene on more than 10,000 kilometers of roads during the last 27 years. It would also be necessary to add the 1,100 bridges and viaducts, as well as the more than 80 tunnels with the best engineering specifications, which are part of the set of works that will make up the first four generations of concessions. Including the 5G program, the 3,600 kilometers of dual carriageways, built and contracted under the road concession scheme, will stand out.

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In terms of employment, road concessions have generated more than 200,000 jobs. In what has to do with their social background, they have not only had a positive impact on the connectivity of the populations, but have also generated life solutions, reflected in the support for the workforce and local productive projects.

Similarly, the concessions have contributed to road safety and housing construction, especially for families living in high-risk areas.
Faced with this undeniable reality, without private investment, surely the State would have been forced to make cuts in education, health, housing, security or justice. Or most worrisome: it would have had to increase taxes, which would have required the processing of various tax reforms.

In the specific case of concessioned roads, the following dilemma arises: should the infrastructure be financed with the taxes paid by all citizens, even those who do not travel on the highways?, or should the payment be made through the toll mechanism? , only those who use the roads?

For now, it is worth noting that the multiple peculiarities of the concessions are the result of serious planning and a vision of the future, but, above all, of having foreseen and promoted since that time —the 1990s— a State policy, eminently pragmatic, which transcends the governments of the day. So much so that six consecutive governments—Gaviria, Samper, Pastrana, Uribe, Santos, and Duque—bet on the continuity of the model and even refinanced it from a financial and legal perspective.

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All these indicators give rise to reminding that the concessioned roads, all, absolutely all, are a property of the State, of each Colombian. In the concessions, the State maintains ownership and control over the infrastructure, which must be reverted once the contract is finished. The respective collection rate, it is worth remembering, finances and attends not only the construction of the works, but also their operation and maintenance. Multilateral banks, investors and financiers blindly bet and trusted this model.

The institutional revolt

During this transfer of 30 years, the institutional framework associated with the concession model has also undergone a profound evolution. Proof of this was the creation of the National Infrastructure Agency (ANI), which replaced the old and discredited Inco. The Financiera de Desarrollo Nacional (FDN) was also conceived to leverage ambitious initiatives of this nature.

As if the above were not enough, the Foundation for Higher Education and Development (Fedesarrollo) and a group of experts were entrusted with the construction of a long-term roadmap for the transport sector, finally embodied in the Transport Master Plan Intermodal (PMTI) 2015-2035, which experts now take to 2045.

Regarding the normative transformations, related to the concession model, it is worth mentioning, for example, the issuance of the infrastructure law, which gave legal ‘teeth’ to procedures as neuralgic as property, environmental and network management.

In the same line the PPP law was promulgated, which revolves around the linking of private capital for the provision of public infrastructure, payment against delivery of works and compliance with service levels.However, for three decades, the clarity and transparency of the bidding processes and the awarding of the respective contracts have been evident, in the successive journey of five generations of concessions.

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Another of the positive externalities that is expected with the completion of the construction phase of the 29 4G roads is the 30 percent saving in travel times. Finally, public and private investment in infrastructure under the concession model is close to 100 billion pesos, resources that may represent an amount greater than 120 billion pesos, taking into account the intermodal projects that are coming under the scheme. APP, within which is also the 5G program.

It is evident, the concession model is a proven successful scheme not only in Colombia: it is throughout the world. Examples of this are the United Kingdom and even China, a country that, despite its affinity with the doctrines of communism, today is the one with the largest number of concessions on the planet. But not to go that far, in various Latin American countries such as Chile, Brazil and Mexico, PPPs have also been the cornerstone of transformation.

* Executive President of the Colombian Chamber of Infrastructure.