View this document in Spanish.

CONCESSIONS: A SUCCESSFUL MODEL

The development of the infrastructure of the country is also dependent on the national network of highways and transportation in order for exports and tourism to thrive. The government of Ecuador recognized at the end of the 1990s that it had to renew its highway system, but it did not have money to do it, so it opened up the public works sector to the private sector through concessions. Private companies were invited to the country to bid on major public works that were urgently needed in Ecuador, and after a public contest they were granted concession through a BOOT model (Build, Own, Operation, Transfer).

"The concessions were excellent alternatives for our country - a lot of money was needed to keep the highways in good conditions, and we needed investors" said the Minister of Public Works, Estuardo Peñaherrera. "We still need to improve our infrastructure, and for this we are proposing new projects and providing guarantees through multilateral credit organizations and heightened legal security" he assured.

But concessions are not only seen as an option of fiscal relief for the government. According to Ricardo Andrade, Sub-Secretary of Concessions in the Ministry of Public Works, concessions "are a mechanism of wealth redistribution. With private resources we maintain and rehabilitate our highways, to ensure international standards across the country".

The opening of the Public Works sector has been well received by private companies who perceive the sector as one that offers guarantees of constant capital returns. The result has been an increase of national and international corporations in Ecuador who thrive thanks to the concessions system.

In this context, the Ecuadorian Company CORPCYS - a newcomer that recently celebrated its two-year anniversary - is adopting ISO 9000 and 14000 certification standards in order to attract future strategic partners and to establish a foothold in the market.

Through cooperation we will grow, predits Ramiro Manosalvas, General Manager of CORPCYS. "We have to combine our strengths and join our first-hand local knowledge of the market together with the international know-how of a foreign company that has experience in the management of collecting tolls, instrumentation and the financing of overall investment capital" comments Manosalvas.

One of these foreign companies is Norberto Oderbrecht, the Brazilian Constructor that has already established a long history in Ecuador. "Ecuador has been taking effective steps towards the establishment of an adequate legal framework for investment projects and concessions" comments Fernando Luis Santos Rios, General Manager of Norberto Oderbrecht Ecuador.

Santos Rios considers that a further opening of the public works sector could increase the influx of foreign currency in Ecuador. He is currently eyeing opportunities to participate in airport, the amplification of maritime ports, the construction of hydro-electric projects and the development of agricultural infrastructure. Tourist infrastructure projects are also on his list, with potential participation in initiatives such as "La Vía del Pacífico", a project that proposes a highway along the Pacific coast.

The Vía del Pacífico is coordinated by the Ministry of Public Works, in collaboration with the Ministry of Tourism, with local communities and hotel owners, promising to build a type of "Ruta del Sol" as found in Spain on the Mediterranean coast.