The second Mexican toll road program: learning from the experience

Abstract

Public-private partnerships have played an important role in the provision of transport infrastructure in emerging countries over the last two decades. From 1989 to 1994 Mexico implemented an ambitious road concession program that has been widely regarded as a dramatic failure. In just five years, Mexico awarded 52 concessions totalling over 5,300 kilometres of toll roads. Nonetheless, as early as 1993 many of the concessions had to be renegotiated and in 1997 the government was forced to take over 23 of them at an immediate financial cost of billions of dollars. In 2003, after a hiatus of nearly a decade, the Mexican government began to offer toll road concessions again. Initially, concessions were offered for new roads but the government soon offered packages including both new roads and some of the older concessions bailed out in 1997. The new program succeeded in attracting bidders and expanded gradually until the late 2000s, when the global financial crisis dampened investor appetite, at least temporarily. This paper examines the key features of the new wave of road concessions in Mexico and analyses why it gained the backing of