According to La Tercera, the government is close to announcing a reduction in Tag tolls (the electronic toll collection device used on highways). In an initial stage, the agreement would involve only Autopista Central, Santiago's largest urban highway. In exchange, the company would receive more years on its concession.
The negotiations, led by the Ministry of Public Works (MOP), have been underway for almost seven months. According to the newspaper, government officials and industry executives say Autopista Central has shown the greatest willingness to negotiate. Government officials sum up the situation with a phrase: "the bread is at the oven door".
The exact reduction is not yet known. According to La Tercera, reports suggest it would exceed 10% of the toll, although it is unclear whether it would apply to the standard toll or the high-traffic toll (the most expensive, charged during peak hours).
The trade-off works like renegotiating a mortgage: you pay lower installments, but for longer. Autopista Central, controlled by Vías Chile, part of the Spanish group Abertis, began in July 2001 with an original term of 30 years. Other toll agreements have already extended it to a total of 397 months, meaning it is currently due to end in August 2034.
Previous negotiations resulted in extensions of between 12 and 25 months, and a similar extension is expected. The company also faces a significant repayment deadline: a US$380 million bond it must repay in December of this year.
Why did the government put the issue on its agenda? The government calculated that a Santiago family has an average monthly income of $1 million and spends around $100 thousand a month on Tag tolls, or 10% of its budget. Minister of Public Works Louis de Grange added in September that tolls on some highways have risen faster than per capita income in recent years.
If a reduction of more than 10% were applied to that typical spending, the savings would be around $10 thousand a month for a family using Autopista Central. The benefit, however, will depend on which toll is reduced and how much you use that particular highway.
The concession operators want to add another issue to the discussion: debt owed by users who are behind on payments or whose debts are simply uncollectible, which, according to La Tercera, exceeds US$800 million. A lawyer working with the companies told the newspaper that the authorities are asking them for a favor to provide a collective benefit, and that it is time they also resolved a collective problem.
The government does not see it that way. An official dismissed the idea that this condition was "a prerequisite", because these are individual commercial negotiations with each concession operator. "That is not on the negotiating table", another government official said.
The initiative began in April, when Martín Arrau, former Minister of Public Works, called together urban and interurban highway concession operators. Separate talks were then set up with each company because their contracts and financing differ, and joint negotiations through the industry association Copsa (Association of Public Infrastructure Concession Operators) could raise competition concerns.
Since then, there have been around ten meetings with each highway operator. On September 24, De Grange said the talks focus on the oldest concessions: Autopista Central, Costanera Norte, Vespucio Norte and Vespucio Sur. The Ministry of Public Works has not officially provided details or a date for the announcement.
