Carlos Plass, who transformed Costa Rica’s largest airport, moves on
For the past two and a half years, Carlos Plass has been the man behind Juan Santamaría International Airport, outside San José. In 2009, after problems with the airport’s former concessionaire, Alterra, Aeris Holding took over its management, placing a fair amount of responsibility on Plass’ shoulders.
Since then, the airport has been vastly improved. It has the capacity to receive 3.5 million passengers annually in a comfortable, state-of-the art terminal that could double its capacity without having to add a single square meter.
“The Juan Santamaría [International] Airport is now like a 21-year-old. It is a young man in college, with a driver’s license and with all the tools it needs to grow up and be successful. It is no longer that confused teenager that did not know where it was going,” Plass said.
As 2011 came to an end, Plass, a Chilean, wrapped up his time as general manager of Costa Rica’s main airport, turning the job over to former airport CFO Rafael Mencía on Dec. 19.
In addition to running the airport and turning it into one of the country’s most successful concessions, in the past two years Plass has also become a spokesman for the public works concession system, a process he calls “evangelization.”
“I started talking about my experience with concessions with friends, and it turned into a presentation that I have shown to chambers, university students, entrepreneurs and politicians from the country,” Plass said.
In Chile, Plass was vice president of the Association of Public Infrastructure Concessionaires and CEO of the Santiago International Airport. For years, Plass saw how the public-infrastructure concession system had changed the face of Chile by narrowing the country’s fiscal deficit and helping solve problems caused by natural disasters.
Plass said he leaves Costa Rica – which he compared to Chile 20 years ago – with the satisfaction of having supervised a successful concession. By better utilizing and understanding concessions, Costa Rica can prosper, he said.
Before becoming “passenger Plass,” as he now refers to himself, he met with The Tico Times and spoke of his departure.
TT: How are Chile and Costa Rica similar in terms of what they can do with concessions?
CP: I come from a country that has similar characteristics as Costa Rica. [Chile] may be bigger in terms of population and territory, but it has the same social issues.
In Chile, we started with lots of difficulties, but the alliances between the public and private sectors became a powerful public management tool. Chile had an infrastructure deficit of $9 billion, very similar to Costa Rica, and in the past 20 years we’ve had an infrastructure investment through public works concessions of $13 billion. There are over 50 contracts in progress, and authorities today see concessions as a solution to solve all infrastructure-related problems.
Why do you think Costa Rica fails to understand the advantages of concessions?
Nothing is free, and people tend to think that services and infrastructure provided by the state are free. That is an aberration; everything has a cost. When the government takes $80 million to build a road, the country misses the opportunity to invest that money in a modern hospital, or the public is deprived of social housing projects, or perhaps a public security program.
In all of these aspects, the public sector works better than the private sector, and yet at times, the money is used elsewhere. That is a high cost to pay.
And a road also has another cost: the cost of driving slowly and perhaps missing a meeting, the cost of fuel, the cost of a flat tire and many other costs. When you charge to use a road that has less of these added costs, you are more sincere with yourself about the real costs of things.
What can be done to change the way people perceive concessions?
Some people use to tell me concessions open the door to chorizos [bribes], but I disagree. It wouldn’t be convenient for the country. With chorizos, [Costa Rica] wouldn’t be able to do more than one or two projects.
I always thought that we needed to open up the Juan Santamaría International Airport to the public, so that people could come in and see for themselves what a beautiful building it is and how good things can be done through concessions.
Why do you think concessions started on the wrong foot here in Costa Rica?
The first two concessions, including the airport, were a disaster. If things would have been done right from the beginning, we would have had much less criticism and people today would be asking for more concessions.
Unfortunately, the San José-Caldera Highway also caused some issues. Government officials didn’t support the project as they should have. If the Public Works and Transport Ministry had built the project, it would have had the same or other issues.
Do you wish you could have done more with your “evangelization” role in favor of the concession system in Costa Rica?
Definitely. When I got here, I realized that it was complicated, since public works concessions had been discredited. Changing the way people viewed concessions was not only good for the work we were doing, but also it was beneficial to be able to develop in a good environment.
There was a lot of misinformation from officials, opinion-makers and the press. I had to identify the biggest critics of the public concessions system, and I invited them to the airport to see what one can achieve by using the system well. The airport is an expression of what private-public alliances can be like.
Why are concessions advantageous?
The 2010 earthquake in Chile caused $30 billion worth of infrastructure damage. Most of those costs were related to housing. Public infrastructure damage was approximately $2 billion, but $1.5 billion of that was in private hands because of concessions. It was a big relief for the government. The concessionaires had the most interest in making everything work again so that they could charge again for those services.
Several hospitals fell, and now they’re being rebuilt through concessions or other alliances between the public and the private sectors.
But in general terms, the country has more money to invest in other important projects where the private sector can’t help. It is a fair system.
People pay for the services they use. Why would a senior citizen from Pérez Zeledón, who will never travel, have to pay for the maintenance of the airport runways? Concessions guarantee tributary justice. People pay for the cost of an opportunity.
What are the problems that prevent the country from having more successful concessions?
There’s a lack of trust in the system and not enough information from officials. But the biggest problem has to do with hyper-legality. It seems that here we are waiting, banging our heads against the wall, and waking up to a paralyzed and congested city because decisions were not made on time.
Solving infrastructure problems needs to be a government priority, and not solely the responsibility of the current administration. Costa Rica’s lack of infrastructure is so bad that it has to be made a government priority. Nothing will be solved from one day to the next. It has to be a long-term project. From the approval to the design and building of public concessions, a private investor may have to deal with four or five administrations, so the problem has to be addressed on a national scale.
Do you believe public works concessions can be used as a tool to boost the economy in times of economic crisis? Was this a strategy used in Chile?
I don’t recall it being used in Chile as a tool to fight the crisis. But the construction sector can really help officials attack issues brought by the economic downturn. It is an intense sector in terms of employment, and it really touches a lot of sectors. It is a sector that can be a major boost to the economy.
In Chile, concessions were used because we had a major traffic problem. Over 2,000 people were dying every year in car accidents, and something had to be done to have better and safer highways and roads. Ricardo Lagos, Chilean public works minister from 1994 to 1998, had a budget of $450 million, and he used to say that about half of that went to pay salaries and the rest was mostly used for maintenance.
Almost nothing was left for new projects. The only solution came with a drastic change and by tackling projects with a different vision.
Where is the Juan Santamaría Inter-national Airport concession at?
Ninety-five percent of what people will see from now until 2014 has already been achieved. The next phase will make room for a future expansion in 2014 and 2015. In order to do that expansion, we need to relocate [the National Oil Refinery’s] fuel facility and [aircraft maintenance cooperative] Coopesa.
Once this phase is over, the airport will expand towards the west side.
But passengers will see very little change. The critical areas for passengers, the check-in area, immigration and baggage claim, are all ready. The check-in area has 28 new counters. We went from 12 to 28 immigration booths, and a fourth baggage carrousel will be added soon. Those are the areas that make a passenger feel that an airport is good or bad, fast or slow and efficient or inefficient, and those issues have all been tackled.
Where are you heading now?
I don’t know yet. The job of remodeling and administering the Santiago Airport will soon be open for bidding, and the consortiums that will participate are already starting to be formed. But I’m also attracted by public service. I have always felt that someday I have to give back, and maybe someday there will be something there for me.
Both Peru and Colombia also have interesting situations in the areas of alliances between the public and private sectors. But Central America is also interesting, and it would allow me to keep an anchor here in Costa Rica.
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