Chile opportunities in infrastructure
Since the 1990s, Chile has worked hard to position itself as a reliable international partner. Thanks to its political stability, responsible macroneconomic management and fiscal discipline, it has consolidated its reputation as a country that inspires investor confidence.
Openness to trade and international integration have made a key contribution to Chile's development. The twenty trade agreements it has place covering 56 countries have, in practice, expanded its domestic market of just 16 million inhabitants to one of over 3.9 billion potential consumers around the world.
Infrastructure development has been important for the expansion of the country. Chile's concessions system, launched 15 years ago, has placed it at the forefront of the development af public infrastructure. Public-private partnerships have converted Highway 5, the north-south backbone of Chile's road system, into a four lane highway, and have also improved airport infrastructure around the country and built new urban highways in the capital, Santiago.
The Ministry of Public Works (MOP) is convinced that the system has made a remarkable contribution to Chile's economic and social development and is crucial for increasing investment while, at the same time, freeing fiscal resources for other uses.
Over 120 companies, including foreign investors from at least eight countries has participated in concessions bids for projects ranging from US$8 million to US$850 million, injecting US$570 million a year into the country's infrastructure. In addition, the system has incorporated new actors such as insurance companies, risk rating agencies, banks, construction companies and infrastructure operators.
The system's development can be divided into three stages:
1991-1994: El Melón Tunnel, Camino de la Madera (Wood Highway), Northern Access to Concepción and Nogales-Puchuncaví Road;
1995-2002: Intercity highways (Highways 5, 68, 78 and 57), airports and urban highways.
2003-2010: Prisons, public buildings, public transport infrastructure, hospitals and the re-tendering of existing projects on completion of their first concession period.
For the period 2009-2001, the system's main challenges are:
1. Extension of the scope of highway and other concession projects, particularly:
-Upgrade of Highway 5 from La Serena to Copiapó. As part of the ongoing development of Highway 5, the MOP plans to offer concession contract for the improvement and maintenance of 190 kms of the highway between La Serena and Vallenar. The concession company will receive toll income as well as a fiscal contribution designed to ensure the contract's profitability. The project envisages a construction period of 32 months and an investment of US$290 million.
-Award of concession contracts to complete the upgrade of the Américo Vespucio ring road in Santiago.
-Award of concessions for east-west road infrastructure to support the development of clusters in sectors tha include mining, agriculture, fishing and special-interest tourism.
Consolidation of the concessions system as applied to hospitals and prisons.
-Start of maritime concessions under the Plan de Conectividad Austral (Southern Connectivity Plan). This infrastructure and transport services plan seeks to promote economic activities, sovereignty and human settlements in the Los Ríos, Los Lagos, Aysen and Magallanes Regions of southern Chile and to facilitate access to very remote areas.
-Extension of the common electronic tolling system used by highways in Santiago to the main intercity roads out of the city.
2.Safety and service standards on concession projects already in operation: This program seeks to raise security norms and standards and service quality on 12 existing concessions and to improve the projects insertion into the surrounding area (links to other roads, connectivity, lghting, impact mitigation and sanitary standards).
3.Road maintenance under concession contracts: This initiative seeks to provide for maintenance of regional networks of paved roads trough a concessions program o performance-based contracts, manged by the MOP's Highways Board and based on the Public Works Concessions Law, with standards in accordance with the level of service required in terms of usability, safety, comfort anda guarantee of structural stability.
4.Bridges Concessions Plan: This forms part of the Bridges Plan which involves a comprehensive evaluation of the current state of existing bridges and possible improvements or replacements. The Plan covers 400 bridges of which 150 are old and, in some cases, have completed or are close to completing their useful life.
The challenge for 2009 is to issue tneder worth US$1.3 billion and award contracts for US$1.1 billion
- Chile opportunities in infrastructure (PDF)