Infrastructure: The Road Just Got Rougher

December 23, 2005

COSTA Ricans continued this year to wonder why, if a portion of gas taxes is supposed to go to road repair, there are more potholes than actual roadway on the nation’s thoroughfares. Both tourism and exports, according to officials from both sectors, are threatened by the dismal state of the country’s infrastructure – from roads to airports to ports.

 

Many expected results from a ruling late last year of the Constitutional Chamber of the Supreme Court (Sala IV), which determined the Finance Ministry must use these funds for road repair, rather than directing them to other ends as it had done before.

 

But instead, government officials, namely the controversial Finance Minister Federico Carrillo, who has since resigned, maintained at the beginning of the year that the financially strapped government needed the revenue from the gas tax for other government programs. The Finance Ministry’s budget for roads this year was half of what it was legally obligated to provide. A 2001 law requires the funds to go to the National Roadway Council (CONAVI), but Carrillo argued the expenditure would increase the national debt and impoverish Costa Ricans.

 

Tourism officials countered that the number-one complaint among visitors to the country is the poor state of roads, and exporters said poor roads add costly time to trips to the country’s ports.

 

However, exporters received good news in April when the National Concessions Council (CNC) approved a project to widen and improve the 68-km stretch of highway from San José north to San Ramón. The $270 million project will be done through a concession and is expected to begin in May 2006.

 

Concessions are public-private partnerships in which a private company builds an infrastructure project, operates it, recuperates its costs through fees and then eventually turns it over to the government.

 

The road for such partnerships got smoother in July, when Rocío Aguilar, head of the National Concessions Council, was named as the country’s new Comptroller General, who must put the final stamp of approval on all concession contracts. Several presidential candidates this year included in their platforms reforming Costa Rica’s concessions law in order to facilitate the partnerships, which they say are a way to improve Costa Rica’s poor infrastructure without much government investment.

 

Also in July, controversy heated up over the proposed construction of a new, enormous, $400-million marina in Golfito, on the Southern Pacific coast. North of Golfito, the Pacific port of Caldera saw its own ups and downs in September. Months’ worth of problems at the shipping port culminated in total paralysis, with so many containers awaiting transport from loading grounds that goods could neither enter nor leave the port for five days. The Finance Ministry’s new customs tracking system, TICA, was blamed, thought some said the system was just aggravating the port’s problems that had been culminating for years.

 

The port has serious infrastructure flaws that cause extensive delays and increases in costs, ultimately passed on to the consumer, port managers said.

 

Again, concessions emerged as a way to improve Caldera, as well as the Caribbean ports of Limón and Moín, which also suffer serious infrastructure deficiencies.

 

Without the use of a concession, the government managed in October to finally get construction started on a 30-kilometer highway to the Northern Zone’s largest city, Ciudad Quesada, after more than 30 years of anticipation. The $62 million project was made possible through a donation and low-interest loan from the government of Taiwan.

 

Another highway project, equally long in the making, also moved forward in December when the Comptroller gave the thumbs-up for the concession to build a road linking the western suburb of Ciudad Colón and the Pacific-slope town of Orotina that, combined with other highway improvements, would ultimately create a direct route between San José and the Pacific Port of Caldera.

 

Six weeks of rains during the months of October and November, repercussions from the hurricane season (see separate story), wreaked havoc on Costa Rica’s already dismal highways. In November and December officials scrambled to find funds to make improvements to the system that transport Minister Randall Quirós called the worst infrastructure crisis the county has seen in 30 years.

 

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