Tapachula-Talisman Highway

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In November 2006, the Mexican Secretary of Communications and Transport (SCT) awarded and signed a 20-year concession contract for the Tapachula-Talisman highway with a consortium comprised of AVZI, S.A. and Concesiones Intercontinentiales, S.L. Both groups were owned by Grupo AVZI, a Spanish firm. The Tapachula-Talisman project was a 45.1 km highway in the state of Chipas, near Guatemala. The 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 Irapuato-Piedad highway and the Queretar-Irapuato Highway were part of the same initiative. Responsibilities of the concessionaire included: widening a 10km stretch from Tapachula to an intersection with a road to Ciudad Hidalgo, widening an 8km stretch from this point to El Talisman, and widening a 27 km branch to Ciudad Hidalgo. Ciudad Hidalgo is on the Mexican-Guatemalan border, and the road was meant to facilitate transport between the two countries. SCT carried out the public tender for the project. 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. Two groups presented offers: Omega Corp., S.A. de C.V. and the consortium comprised of AVZI, S.A. and Concesiones Intercontinentiales, S.L. The contract established an association between SCT and the private participant to maintain, modernize and widen a 45.1km road. In exchange for those services, the private participant received periodic payments from SCT. Periodic payments come from two parts: a minimum payment for the functioning of the road according to the standards set by the contract; and a “shadow toll” or payments linked to traffic levels as determined by the SCT. The Tapachula-Talisman highway was divided into sections, and SCT was to pay AZVI for each section built. AZVI received financial backing from Banco Santander Serfin, through a 14-year credit that was to account for US $72.3 million. Banco Santander Serfin also financed the Irapuato-Piedad highway, and the Queretaro-Irapuato highway earlier in 2006. Construction was to begin in March of 2007 and end in 2008. In November 2010, the highway was innaugurated by President Calderon, although an 8km stretch linking the highway to the town of Talisman, which was initially part of the project, had yet to be completed and was suspended. Spoke with SCT on 4/11/2007 to confirm that the signing of the contract was legally binding in 2006.