The General Comptroller of Costa Rica partially approved the $20.7 million trust fund for the San José-San Ramón road corridor.
In a document published on the General Comptroller website on October 10th of this year, it was reported that the approval is given to the trust fund for this road work that consists of the modernization of a 60 kilometer stretch of road between San Jose and San Ramon.
After having faced multiple delays, it has been reported in Costa Rica that in the second half of 2019, the first works to expand the road between San José and San Ramón will begin.
The Minister of Public Works and Transport, Rodolfo Méndez, explained that "... in the second half of next year the start of the expansion work is planned, including three main bridges with resources from CONAVI contributed to the Trust and other works will be defined at a later date such as exchanges and interconnections."
In Costa Rica, six out of eight banks are opposed to the possibility of lending the $35 million required to finance technical studies for a new highway between San José and San Ramón.
Nacion.com reports that "... Since November 29, the Bank of Costa Rica, administrator of the trust for the highway, knocked on the doors of Banco Nacional, BAC San José, Davivienda, Banco Internacional de Costa Rica (BICSA), the Banco Interamericano de Desarrollo (BID) and Instituto Nacional de Seguros (INS) to raise the money. However, those institutions rejected the request for different reasons."
With the changes to the contract approved by the Comptroller General, Banco de Costa Rica has become the project supervisor of the road expansion project.
"...The main change is that Banco de Costa Rica will be in charge of the Project Management Unit (UAP) and therefore will have to provide the entire administrative team needed to manage the next phases of the route.In addition, it will assume work such as the selection of contractors for different works."
After several months of discussions, approval has finally been given to the Bank of Costa Rica to take full control of the construction project for the route between San José and San Ramón.
The financial structure and execution of the work will now be the responsibility of the Bank of Costa Rica (BCR), which was awarded the contract for administration of the trust.For four months the discussion revolved around the conflict of interest that could arise if full control was given to the BCR, delaying the start of works.
The trust agreement between the government and Banco de Costa Rica for the implementation of the expansion project of the San Jose-San Ramon road, has received approval from the Comptroller General of the Republic.
The project, indispensable for the development of the northern part of the Great Metropolitan Area, has suffered from years of delay after successive setbacks with concessionaire construction companies, social protests because of the expected rise in tolls and the burdensome compensation paid by the State to these companies.
The Ministry of Public Works has not ruled out granting in concession the extension of the Florencio del Castillo highway, a project estimated at $350 million.
The law to develop a public works development trust for the expansion of the road to Cartago contemplates the possibility of using a concession to develop the project.
The construction project which will be developed through a trust has three sections of 1.6, 12.6 and 41 kilometers each, with three, four and two lanes in each direction, respectively.
The details of the project"Trust for the San Jose-San Ramon Road Corridor and its ring roads", awarded to Banco de Costa Rica, note that the first tranche from the Metropolitan park La Sabana to the the Interchange of the Circumnavigation, there will be three lanes in each direction with external and internal shoulders and dividing rails.
The government is assessing the concession of construction of the last stretch of 8 kilometers of the new road in San Carlos, for an approximate value of $75 million.
Lack of resources has forced the Ministry of Public Works and Transport to evaluate the option of creating a trust or a grant to complete the work of 44 kilometers between Florencia in San Carlos and Naranjo.
Through a trust with a state insurer $35 million will be used to finance the construction of a major road link in the east of the Greater Metropolitan Area.
The stretch of road between Hacienda Vieja, Curridabat, and the Garantías Sociales roundabout in Zapote, will be developed using a trust, explained Carlos Villanta, Minister of Public Works and Transportation, adding that"...
The Bank of Costa Rica has been selected to hold the trust which will be used to manage the project to expand the highway between the capital and the city of San Ramon, which will cost approximately $500 million.
The extension of this road is a long-standing project, and has faced a host of problems, including the cancellation of the initial concession of the work, which involved a payment of $35 million to the Brazilian construction firm OAS, which in turn had bought the contract from Autopistas del Valle.
The process of selecting trustees for the construction and operation of a major road work is running out of participants.
In February, when the law enabled the use of a trust to finance and build the road from San Ramon to San Jose, seven banks expressed interest in participating in the process, but now, following Banco Nacional´s decision to withdraw a few months ago, two other private banks have also decided to step aside.
The amendments made to the law on the trust to finance the expansion of the road from San Ramon to San Jose, limit sthe interest of potential trustees.
The Ministry of Public Works and Transport argues that the changes made to the original text raise questions for potential banks interested in setting up the trust, particularly because it does not include, among other things, the information necessary to determine the financial feasibility of the project. "...The practical effect of this gap in the law is that there is not the desired and necessary security required in the case that there is a need to go to the market to raise funds to finance the work. "
Three months after a law was signed that supports the use of a trust to expand the San José-San Ramón highway, a bank has not yet been selected to administer the funds.
Although four banks have already expressed interest in participating in the contest, the authorities at the National Highway Council (CONAVI) not only have not selected any one of them, they are only just preparing "....
In Costa Rica four private banks and two state banks have expressed interest in becoming trustees of the $436 million trust fund for expanding the road from San Ramon to San Jose.
Public banks interested in becoming trustees of the project are the Bank of Costa Rica and Bancrédito, and the private banks are Scotiabank, Lafise, BCT and Improsa. Representatives from the Ministry of Public Works and Transportation (MOPT) announced that the next phase will establish the conditions and timetable for the tender to select the trustee.