Rio Verde - Ciudad Valles Highway

Active

Prospective

On August 8, 2007, the Mexican Secretary of Communications and Transport (SCT) signed a 20-year concession contract for the Rio Verde – Ciudad Valles highway with a consortium comprised of Ingenieros Civiles Asociados SA de CV (ICA) and subsidiaries. The Rio Verde – Ciudad Valles highway concession entitled the consortium the right to 1) operate, conserve, maintain, modernize, and widen Tranche I from Río Verde – Rayón, 36.6 km; 2) construct, operate, exploit, conserve, and maintain Tranche II from Rayón – La Pitahaya, 68.6 km; and 3) operate, conserve, maintain, modernize, and widen Tranche III from La Pitahaya – Ciudad Valles, 8.0 km. All three stretches were to operate under the terms of the Private Service Contract or Contrato de Servicios de Largo Plazo (PPS). The PPS initiative was part of the new Public-Private Partnership (PPP) program began in 2005 to improve the quality of public services through long-term partnerships between the government and private sector companies. The contract was awarded through an international competitive tender that began on June 27, 2006 by SCT. To participate in the public tender, each bidder had to calculate and submit a requested payment as a function of construction, maintenance and operating costs, rate of return on equity, estimated annual traffic and duration of contract. The concession was awarded to the bidder who presented a proposal that complied with the technical, legal and financial requirements established in the bidding documents, and requested the lowest net present value of periodic payments. Three consortia presented offers: • Ingenieros Civiles Asociados SA de CV (ICA); Controladora de Operaciones de Infraestructura SA de CV (an ICA subsidiary); and Desarrolladora de Proyectos de Infraestructurea SA de CV (another ICA subsidiary) • Concesiones Intercontinentales, SL; AZVI, SA; Trayecto Infaestructura SA de CV; and Obras Subterraneas SA • Promotora del Desarrollo de America Latina SA de CV and Promotora Inbursa SA de CV On July 5, 2007, the ICA led consortium was formally awarded the public bid for the project. Total investment commitments for the project were estimated at US $341 million. Under the PPS contract, the concessionaire of the entire 113km “shadow toll” road from Rio Verde to Ciudad Valle was to receive revenues from two types of periodic payments from SCT: a minimum payment for the availability of the road according to the standards set by the contract; and a “shadow toll” or payment linked to traffic levels. Construction of the new section started in October 2007 and was expected to be completed by March 2010. The highway was operational by the end of the fourth quarter of 2012 according to company reports. The remaining 68 km to open were opened in June 2013, with one toll plaza still to be constructed. The IFC estimate was US 341 million, but ICA's estimate was US $300 million.

Transport

World Bank Group

Project

Government, Road, Commercial