San José, Costa Rica, since 1956

Infrastructure Projects Ran into Obstacles

The road to infrastructure development this year was a bumpy, obstacle-filled ride, with bureaucratic setbacks delaying progress on much-needed road repairs and airport expansion projects.

Former Tourism Minister Rodrigo Castro kicked off the year on a positive note by proclaiming his faith in the government’s abilities to improve infrastructure setbacks that pose a problem for the tourism sector.

In January, then-President Abel Pacheco (2002-2006) and Public Works and Transport Minister Randall Quirós announced that various construction companies were awarded more than 20 three-year contracts to maintain 4,500 kilometers of national roads.

Though Quirós said that by the end of his administration in May the roads needing repair would be “drivable,” two builders not chosen for contracts appealed the process in April.

While the appeal was under review, frustrated members of the tourism sector in Guanacaste launched an ad campaign denouncing the poor state of their roads. The Guanacaste Chamber of Tourism (CATURGUA) published full-page ads in several daily papers in March stating that beaches such as Tamarindo and Flamingo were “practically isolated because of the deplorable state of national roads.”

Use of the roads and the region’s burgeoning growth was evidenced by a report in February that said requests for construction permits in the northwestern province of Guanacaste had shot up by 762% during the previous 12 months, compared to the same time period the year before.

By the end of March, Guanacaste residents took their frustration to their potholefilled streets in a protest that blocked roads to several key tourism beaches. The protest ended with the government’s promise to resume the emergency road-repair it had begun in January. Patchwork started that same day.

In June, the Comptroller General’s Office announced its approval of the 22 road maintenance contracts, which got under way in July.

That’s not the end of the saga, however. By December, the Ministry of Public Works and Transport had fined seven of the businesses more than $225,000 for using asphalt mixes that did not meet quality standards, falling behind on project deadlines and being short of personnel.

The year also witnessed ongoing problems with the expansion of the country’s main airport, JuanSantamaríaInternationalAirport managed by the private consortium Alterra Partners.

After being on hold for three years because of a contract dispute between Alterra and the government, construction of a new terminal began in January.

A contract addendum was approved in February by the Technical Council of the Civil Aviation Authority (CETAC), but required approval from the Comptroller General’s Office, which oversees all government contracts. The Comptroller’s Office, which issued the report that triggered the multimillion-dollar dispute that initially delayed the project, in February determined the contract was incomplete. In March CETAC turned in the contract again it with

modifications, but again it was rejected.

By June, CETAC, the Transport Ministry and Alterra Partners submitted the contract for the third time with a new modification, an agreement that the government should receive 35% of the profits on the airport over a certain limit instead of the original 20%. This would mean 65% of profits would have gone to Alterra, enough funds for the consortium to finish the airport remodeling and pay off $120 million in international loans. However, the Comptroller General once again rejected the contract in August, saying it did not fix the airport’s financial imbalance. This time, the rejection prompted Alterra to announce it might give up on its 20-year contract and pull out of Costa Rica.

In November, banks and Alterra associates began examining the option of extending Alterra’s debt payment deadline to solve its financial problems.

In December, the government announced the start of a seven-month process to rescind Alterra’s contract (see separate story).

Despite the roadblocks, two new boarding areas were inaugurated Dec. 12. A new $12 million terminal, which at year-end was 35% completed, is scheduled for inauguration in early 2008, according to MOPT.

A new terminal is also under construction at the DanielOduberInternationalAirport in Liberia, capital of the northwestern province of Guanacaste.Work on the $1 million project started in October and is expected to conclude early next year.


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