The end of a harmful contract for the country

Michael Taylor

Global Courant 2023-04-14 11:03:56

In 1997 a shameful case occurred for the country. The government of President Álvaro Arzú awarded the Palín-Escuintla highway as a concession to the company Marhnos for a period of 25 years. If this toll road had been built in a public-private partnership, there would have been nothing wrong because in this model the private sector provides the capital, project management experience and technology, while the government provides the regulatory framework. , access to resources and commitment to the community. However, none of that happened. The State of Guatemala made a loan of 50 million dollars to the Central American Bank for Economic Integration (CABEI), with which it built the highway, that is, the Mexican company did not put a single penny and kept the goose that laid the golden eggs . How was this contract harmful to national interests signed? The answer is very simple: the economic interests of the Arzú family prevailed over those of the State.

Contract 642-97-DGC, of ​​September 11, 1997, states that the State granted Marnhos the concession for the operation, maintenance and conservation of the 29.63 km section. He authorized the collection of the toll rate, of which the State barely corresponded to 1% of the income. The only commitment of the company was the construction of the Escuintla-Puerto Quetzal section, of 37 km, which was valued at Q129.3 million. However, the Mexicans did not have to put anything out of their pocket, since that money was going to come out of the first two years of operation of the highway, when they did not have to deliver any dividend to Guatemala either. The funny thing about the contract is that Marnhos was not committed to maintaining the Escuintla-Puerto Quetzal section, which is why, 22 years later, it is a mess and full of craters. Now Marnhos appears again for a new business to rehabilitate that road, which should have been maintained.

The economic interests of the Arzú family prevailed over those of the State in the concession of the Palín-Escuintla highway.

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Haroldo Shetemul

On April 24, the concession will expire and the highway will become the domain of the State of Guatemala. This is the moment to recover an asset that cost Guatemalans 344 million quetzals, funds that are still owed to CABEI, while Marnhos got billions for absolutely nothing. Just to give an example: of the Q15.25 that each driver of a sedan vehicle pays for highway tolls, the State barely receives 15 cents. This is an absolute shame and shows how harmful this contract signed by former President Álvaro Arzú meant. The problem is that with just 10 days to go until the deadline, the government of Alejandro Giammattei has not said how the highway will be managed, whether it will be managed by the State or whether it will be granted again as a concession. When there is hermetic silence it is because it smells of corruption again.

How do toll roads work in other countries? In the United States, toll roads are built by private companies that run them for a period of time and then turn them over to state and federal transportation departments. Highways are also financed through toll payments or by state, federal, or bond issuance funds. In Mexico, the institutions related to toll roads are the Secretariat (ministry) of Communications and Transportation and the National Infrastructure Fund. The first is in charge of granting concessions, supervising the construction and operation of toll roads, and establishing toll rates. The second is a decentralized entity that finances the country’s infrastructure projects, including toll roads.
Hopefully these models will be taken into account to define the future of the Palín-Escuintla highway and that the funds it generates will be used to build new roads.

The end of a harmful contract for the country

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