Mexicans Take to New Toll Roads, Holding Tight to Their Wallets
BRONZED and rested, computer consultant Katiuska Perez is back from a holiday in Acapulco via the new ``Autopista del Sol'' (Sun Highway).Skip to next paragraph
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Like many Mexicans, Ms. Perez praises the shorter driving time (3 1/2 hours instead of six) on the toll road linking Mexico City to the famous resort. But she complains about how it pinches her pocketbook: ``240 pesos [about $77] each way! That has to be some of the most expensive scenery in Mexico,'' she says.
The Sun Highway is the ``jewel in the crown'' of more than 4,000 kilometers (2,486 miles) of privately-run highways built since 1989.
In 1988, most major cities here were connected by crowded, two-lane highways. President Carlos Salinas de Gortari promised 4,000 kilometers of new four-lane roads by the end of 1994 - the most ambitious privately-funded highway program in the world. The $8.5 billion program has taken on greater relevance with the passage of the North American Free Trade Agreement. Mexican companies see the roads as crucial in enabling them to compete and ship goods north.
The Salinas government has surpassed its goal and is building more private roads, but the tollways are among the most expensive in the world. In the United States, drivers pay 3 to 14 cents a mile on toll roads. Mexicans pay about 20 to 80 cents a mile, says William Reinhard, editor of Public Works Financing, a US trade publication.
Mexican bus companies threatened to boycott the Sun Highway when it opened last July. The consortium operating the Sun Highway reportedly agreed to a 15 percent discount for private bus firms. ``The original tariffs were exceedingly high,'' says Francisco Martinez, spokesman for the National Chamber of Passenger and Tourist Transportation, representing about 700 bus companies. ``They want us to use the roads, and we want to give better service to our customers. So we've reached mutually beneficial agreements.'' That means discounts on some roads and agreements not to raise prices for given periods of time.
Truckers, particularly independent operators, are even more unhappy about the rates. The Mexican trucking industry currently is being deregulated, in the midst of an economic slump. Using the toll road may mean less wear on the vehicle and faster delivery times, but the sizable tolls can cut into profits. The Mexico-Acapulco tollway, for example, charges a six-axle truck almost $450 dollars each way.
Grupo ICA, one of the largest Mexican construction firms involved in the highway program, reported in October that traffic was running well below original projections on many routes. Officials at the Mexican Secretariat of Communication and Transport counter that traffic is increasing. And trucking industry representatives agree that there is progress. ``We're negotiating with individual concessionaires and at the national level,'' says Cristina Gomez of the National Chamber of Freight Transportation. ``Some satisfactory agreements have been reached.''
One reason for the high prices charged on Mexican toll roads is the cost of financing. Today, corporate loan rates are around 18 percent. ``When we started this program, the economic situation was much different than it is now,'' says Oscar de Buen, director of the responsible government ministry. When the program began, inflation was about 40 percent. For more than five years bank loans were unavailable, and the bidding process reflected these conditions.
Investors were granted concession periods ranging from two to 10 years, with 20 years the maximum allowed by law. To recoup their money before the concession runs out and the road became state property, the tariffs are set high. Most highway building programs in the US are amortized over 30 years or more.
In some cases, cost overruns may be responsible for pumping up toll fees. The Acapulco highway cost $900 million, almost twice as much as the original bid. But the Mexican government is making adjustments. In December, a law was passed extending the period for concessions to 30 years. And the bidding process will now favor the contractor proposing the lowest tolls, Mr. de Buen says. Before, the concession went to the bidder who could build the road the fastest. In some cases, the government contributed 10 to 20 percent of the cost of a highway.
The government is also acting as a mediator between concessionaires and users. It is proposing that discounts be given for ``frequent users'' and for trucks carrying lighter loads.
The government wants to attract foreign investors to its highway building program, so far with little success. ``There is often a lot of skepticism about new programs. Investors like to watch and wait for results,'' de Buen says. However, government officials from Japan, Indonesia, Panama, the US, and Venezuela have already visited the new highways to learn from the Mexicans.