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New concession terms will push up project costs (Chile)

The Chilean public works ministry's (MOP) plans to incorporate new clauses in future highway concession contracts will translate into higher costs that will have to be met either by users or the state, according to Clemente Pérez, president of concessionaires' association Copsa.

The new clauses, announced this week by public works minister Hernán de Solminihac, stipulate that highway tolls be suspended in circumstances such as earthquakes that lead to problems with the service.

The extra cost of adapting to the measures will be incorporated into proposals when bidding for concessions, Pérez said, without specifying how much the costs are likely to go up.

"You can start by saying OK, let's not charge [tolls] when there's an earthquake and the highway collapsed, and then end up saying let's not charge because out of two lanes on a highway only one is operative because the other one is under maintenance, and so on," Pérez told reporters.

The measures announced by MOP also involve strictly enforcing seismic construction standards. While Copsa is willing to adapt to the new contracts, the clauses will lead to construction of more expensive "premium highways," which will mean either higher tolls for users or longer concession terms, the executive added.


Copsa presented an evaluation of concessioned infrastructure that was damaged by the 8.8-magnitude earthquake that hit the country in February 2010. Around 90% of repairs are currently complete after concessionaires spent some US$270mn on works such as rebuilding overpasses and repaving roads.

"One of the main important lessons from the earthquake was that although a lot has been invested in infrastructure in the last 15 years, we still have an infrastructure deficit," Pérez said, adding that concessionaires had largely passed the test in terms of responding to the disaster.

The 2010 earthquake damaged around 100km of Chile's 2,200km of concessioned highways.

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