Description: A Retrospective on the Mexican Toll Road Program (1989-94)

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A Retrospective on the Mexican Toll Road Program (1989-94)

Mexico's private toll road program more than doubled the national toll road network from 1989 to 1994. The investment of approximately US$13 billion in the program was sourced from local commercial bank debt, concessionaire equity, and federal...

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Bibliographic Details
Main Author:	Ruster, Jeff
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCESS ROADS ACCOUNTING ACTUAL TRAFFIC ACTUAL TRAFFIC VOLUMES AFFILIATES ASSETS AVERAGE DAILY TRAFFIC BANKING SECTOR BANKING SYSTEM BLACK MARKET FOR TOLL TICKETS BONDS BORDER CROSSING BRIDGE OPERATOR BRIDGES CAPITAL FLOWS CAPITAL MARKETS CASH FLOWS COLLATERAL COMMERCIAL BANKS COMMERCIAL LOANS CONCESSION AGREEMENT CONCESSION DESIGN CONCESSION REQUIREMENTS CONCESSIONAIRE CONCESSIONAIRE EQUITY CONCESSIONAIRE REPORTING REQUIREMENTS CONCESSIONAIRES CONCESSIONS CONGESTION PRICING CONGESTION RELIEF CREDIT ANALYSIS DEBT DEBT FINANCING DEBT SERVICE DEPRECIATION EMPLOYMENT EQUITY INVESTMENTS FEES PAYABLE FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL RESTRUCTURING FINANCIAL STRUCTURE GRADE GROSS MARGINS HIGH FLOATING INTEREST RATES HIGHWAYS INADEQUATE TOLL COLLECTION OPERATIONS INFLATION INSUFFICIENT TRAFFIC INSURANCE INTERCHANGES INTEREST COSTS INTEREST RATES KILOMETERS OF ROADS LEGAL FRAMEWORK LIQUIDITY LOAN DOCUMENTATION MAIN ROAD CORRIDORS MATURITIES MATURITY NATIONAL TOLL ROAD NETWORK NEW HIGHWAY ROSE NEW TOLL ROAD NONRECOURSE FINANCING NUMBER OF LANES OPERATING COSTS OPERATING INCOME PASSENGER PASSENGER BUS PEDESTRIAN BRIDGES PRINCIPAL BORDER CROSSINGS PRIVATE SECTOR PRIVATE TOLL ROAD PRIVATE TOLL ROAD PROGRAM PROJECT FINANCE PROVISIONS PUBLIC DEBT PUBLIC TOLL ROADS REGISTRATION PROCESS REGULATORY FRAMEWORK REVENUE PERFORMANCE RIGHTS OF WAY ROAD CONSTRUCTION ROAD CONSTRUCTION PROGRAM ROAD TOLLS ROAD USAGE ROUTES SAVINGS SCHEDULE OF TOLLS SCHEDULE OF TOLLS BY CATEGORY OF VEHICLE SPEED STRUCTURES TAX TAX CREDITS TIME DELAYS TOLL ADJUSTMENTS TOLL BOOTHS TOLL BRIDGE TOLL COLLECTION TOLL COLLECTION PROCEDURES TOLL REVENUES TOLL ROAD TOLL ROAD CONCESSIONS TOLL ROAD LOANS TOLL ROAD PROGRAM TOLL ROADS TOLLS FOR CARS TRAFFIC TRAFFIC DATA TRAFFIC FLOWS TRAFFIC STUDIES TRAFFIC STUDY TRAFFIC SURVEYS TRANSPORT TRANSPORTATION TRIPS TRUCKING TRUCKS TRUSTEES VALUE ADDED TAXES VEHICLES TRANSPORT INFRASTRUCTURE TOLL ROADS & HIGHWAYS INSTITUTIONAL FRAMEWORK COST OVERRUNS TARIFFS TAX ADMINISTRATION GOVERNMENT POLICY DEBTS BIDDING LEGAL ASPECTS
Online Access:	http://documents.worldbank.org/curated/en/1997/09/441281/retrospective-mexican-toll-road-program-1989-94 http://hdl.handle.net/10986/11573

Description
Summary:	Mexico's private toll road program more than doubled the national toll road network from 1989 to 1994. The investment of approximately US$13 billion in the program was sourced from local commercial bank debt, concessionaire equity, and federal and state government grants and equity contribution. However, gross miscalculation of investment costs and operating income led to an unsustainable set of operating conditions for these limited recourse financings. The financial equilibrium of the sector was further undermined by the Mexican currency crisis of December 1994. All these brought the project development to a standstill and resulted in widespread financial and economic repercussions. Some industry observers have characterized the toll road program as a poorly designed effort to develop the infrastructure the country needed to compete effectively in an era of free trade. From a private investment perspective the impact was to shut off capital flows to the sector and to add to the Mexican banking system s non-performing loan portfolio. This Note presents a diagnostic of key policy, regulatory, and institutional gaps that undermined the financial equilibrium of the sector. A checklist of recurrent problems illustrates how the failure to address these issues manifested itself in the course of implementation.