Mexican Road Reprivatization:

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Mexican Road Reprivatization

• A new attempt to Attract Private Investment to
  the Road Network

Luis Calzada Alberto Gomez Isabelle Niño Mary
Rachide Steve Smith
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Agenda

• Background
• Current Situation
• Issues
• Discussion
• Conclusions
• Questions

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Background

• Mexico
• Reform process during late 1980s and early
  1990s
• The Mexican Peso crisis
• First Toll Road concessions
• CAPUFE and FARAC

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Current Situation

• Government objectives
• Proposed plan
• Description of roads

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Current Situation

• Mexico-Queretaro
• 222 km
• 24.5 million vehicles
• US210 million

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Current Situation

• Mexico-Puebla
• 125 km
• 33.6 million vehicles
• US132 million

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Current Situation

• Queretaro-Irapuato
• 99 km
• 12.5 million vehicles
• US78 million

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Issues

• Risks
• Operating Risks
• Political Risks/ Creeping
• Financial Risks/ Currency issues
• Forecasts
• Possible options

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Operating Risks

• Revenue
• Traffic Volume- accurateness of the forecast and
  reliability of the government figures
• Traffic Volume- GDP Growth
• Toll rate (flexible but with limitations)
• Major and Minor maintenance
• Force Majeure (flood, earthquake)

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Political Risks

• Creeping expropriation, fees and restrictions
• Direct expropriation- end of concessions
• Performance of Legal System
• Trade restrictions
• Force Majeure (sabotage, insurrection)

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Financial Risks

• Exchange Risk
• Senior Debt Service and Interest Rates
• Cash Control

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Discussion
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Questions