Q-1: Mr. Freixas, since when does Argentina incentive private investments in your sector, and when did Autopistas del Sol begin its activities?
A-1: This privatization began in 1991 when the government realized that it was impossible for them to invest in the maintenance of the existing roads. The license was for 10,000 kilometers of highways in all the country. That was the first privatization program. We started our operations by the end of 1993 when the government decided to privatize the concession of the three most important highways in the area of Buenos Aires. The Northern access is the most important one because it receives almost 600,000 cars every day. We signed the contract at the end of 1993 and we started our operation in 1994.
Q-2: What is the length of the motorways you are responsible for?
A-2: About 120 kilometers.
Q-3: You have already mentioned the high number of cars that are using the highway every day.
A-3: Yes, 600,000 cars. Half of these cars pay our fares every day and the other 50% use the free motorway and the Gral. Paz Avenue that are toll free.. Maybe in Chicago there are some highways with this amount of traffic. Autopistas del Sol has a Customer Service area that makes contact with 10,000 customers every month.
Q-4: What is the level of your customer’s satisfaction?
A-4: The people that use the free motorway are absolutely satisfied. I think that it is uncomfortable for the customers to use the manual way because they have to stop and pay every time they want to pass the barrier. That is the reason why 40% of our customers are using the electronic system, which allows them to continue and to pay the fare every month and not each day. They are frequent customers and they do not perceive the impact of paying the fare every day. So, it is the same as paying the bill of any public tax. We do not have any problem with these customers but we do have some issues with the customers that use the manual way. They sometimes appeal to some tricks to pass the barrier without paying. So we are trying to promote the use of the electronic system, which allows us to increase the traffic and also represents more profits for the company. This is a difficult topic because the customers do not like to pay every time they have to pass by a motorway but they know that the highways are in better conditions now than 10 years ago. We have high standards of customer’s satisfaction. They recognize our effort and our investments. Autopistas del Sol has invested 800 million dollars. We will invest another 65 million this year in the highway. Most of our customers are asking for more security but this demand is something that the police have to take care of. Anyway, we are paying the police to control the highway.
Q-5: Are they private security forces?
A-5: No, in our country you are allowed to pay the police if you want to be secure. The cost of this work is 5,8 dollars per hour. We have 20 policemen working for us. They control the traffic and look after the security of the highway.
Q-6: Autopistas del Sol is integrated by Dragados Dycasa Aurea (Spain), Impregilo Iglys (Italy) and Sideco Americana. Why did Impregilo Iglys transfer its shares to Impreglio International Infrastructure, and most important, why now?
A-6: This is a new and fashionable way that the international companies use to organize their work. Impregilo is organizing the concessions of all its international branches. Dragados will transfer all the concessions to Aumar in the near future. Aumar had changed its name to Aurea. The new strategy of Aurea is to have more businesses all around the world. This is possible because the law changed in Spain and now allows the concessionaires to participate in other businesses. That is the reason why Aurea started to look for new concessions. Sideco Americana is an Argentinean company and the third shareholder of Autopistas del Sol.
Q-7: What is the role of Servicios Viales S.A. - Sideco Americana holds approximately 77% of the stock - in Autopistas del Sol?
A-7: Servicios Viales is a different company that won part of the concession of the 10,000 kilometers of Highways. This concessionaire is connected with us in the motorway that goes to Rosario. Our concession finishes in Campana and Servicios Viales operate from Campana to the North of the country. We use the same electronic system.
| Q-8: Within the infrastructure program announced by the government, Servicios Viales obtained concessions with a total value of 56 million Pesos, mainly for the highway route from Rosario to Cordoba. What do you expect from the so-called Plan de Infrastructura”?
A-8: The Infrastructure Plan is based on the development of the activities related to the construction. I think that this is a very important plan. Our contract does not allow us to compete for new concessions. Autopistas del Sol asked the authorities if they could review this part of our contract in order to allow us to be part of future concessions. If we obtain a positive response, we will be able to participate in part of the concessions for the 10,000 kilometers of highways that will be open by the end of this year.
Q-9: Would you consider working with new partners to bid for other concessions?
A-9: I think that it is not necessary to have new partners. Perhaps they can help us with the financing of the project. Our company has a lot of experience in this business and we have now enough partners in order to continue with our operations.
Q-10: When do you plan to include new partners for the financing of the project?
A-10: Our contract establishes that we have to sell 30% of our company in the stock markets. That means that we will have 30% of new shareholders. In 1997 we place notes for 380 million dollars mostly in the United States. This amount of money represents most of the finance of our company. The first note expires in three years from now. We want to renegotiate them. This is possible because we have a very good qualification in the markets.
Q-11: Do you see the investments in the field of train transportation within the Infrastructure Plan as a competitive or complimentary element?
A-11: I think that they will be a complement because we need another alternatives for the development of the northern infrastructure in ten years from now. If there are not any alternatives, our company will not be able to operate with large amounts of traffic. This would be very good for us in terms of profits but the customers will not have the same quality of service.
Q-12: What would be your assessment on the privatization process and its results?
A-12: The private sector invested for the building of the highways. The government negotiated with the private sector to return their investments through the collection of toll. We made a contract with the public sector for the concessions. We have to invest in order to receive benefits from the highways. Autopistas del Sol wants to provide the best service. The State would never provide this quality of service. First of all because they need an authority to control it. We did not have a good experience in Argentina with formers governments. Lots of public services had problems because of technical mistakes during the building of the highways. Autopistas del Sol is controlling the quality of the service because we are aiming to have a good qualification among our customers and the people in general.
Q-13: Mr. Freixas, as you know most of our readers are top executives and businessmen. What would be your final message to them?
A-13: They have to consider Argentina as a possibility of investment. They have to understand that we have to face the same problems as every other country in the world. They do not have to compare us to other Latin American countries. I think that in Argentina there are a lot of opportunities. The Citicorp chose us as one of the best transaction of the year 1997 when Autopistas del Sol sold their notes in the market. We received offers for more than 600 million dollars. We will have to renegotiate our notes in two years from now. Autopistas del Sol wants to be selected as the best alternative.
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