Government to Call for Bids on Road Concessions

The federal Government has recently announced that a new concession system will be implemented for the operation and maintenance of 9145 km of roads. The system will be called the "Federal Concession Network," and its aim will be that these roads are managed by private operators, to reduce fiscal deficit and increase transparency.

The Federal Concession Network contemplates a bidding process to conserve, maintain, rehabilitate, and exploit through toll collection more than 6400 km of roads and highways currently operated by the state-owned company Corredores Viales SA and the private concessionaire Caminos del Rio Uruguay SA; and over 2600 km of roads that are currently not under concession.

The selection of the concessionaires will be carried out by means of an international bidding process according to the regime in Law 17520 on Public Works Concessions, as recently amended by the Bases Law 27742 and its implementing regulations.

The Government plan has two stages: 

1. The first stage would be awarding the operation of two sections of Corridor 18, which mainly include federal roads 12 and 14 and the Rosario-Victoria Bridge. The call for bids is expected to be launched before the end of December 2024.
2. The second stage would provide for the bidding of 8470 km of routes, which include the sections currently operated by Corredores Viales SA and federal roads 33 in Santa Fe, 181 in Entre Rios, and 19 in Cordoba. The call for bids is expected to be launched in February 2025.
The Ministry of Economy will be in charge of the bidding process, while the Argentine Highway Authority (DNV) will design the technical specifications and contractual documentation and will also be the enforcement authority of the relevant concession contracts. 

According to information released by the Government, the new concession system will have, among others, these characteristics:

1.    concessions will be self-sustainable (concessionaires will not have to make payments to the Government and will not receive subsidies), 

2.    tariffs will be capped in the bidding documents and automatic quarterly adjustments will be applied on the basis of official indexes,

3.    the new tariffs will only be applied once the relevant roads have met the condition of being "safe for transit,"

4.    the terms of contracts will be set out in the bidding specifications, 

5.    a Free Flow system will be gradually introduced,

6.    new service areas may be established in the relevant roads,

7.    dynamic weighing and load control systems will be implemented.

The Government has also informed that concessionaires will have to carry out initial refurbishment tasks. The bidding terms may provide for the construction of new works, provided that they are financed through toll revenue.

The bidding process will be organized under a two-stage system and will be carried out through the CONTRAT.AR platform. Through this platform, interested firms may consult the relevant terms and conditions and submit bids, bids will be opened, and communications will take place between the bidding authority and the bidders.

Recently, through Resolution 35/2024 of the Office of the Chief of the Cabinet of Ministers, and Resolution 84/2024 of the Procurement Office, the registration and validation as external users of the CONTRAT.AR system was regulated for those firms interested in participating in contracting procedures governed by Law 17520 on Public Works Concessions.