SIX OUT of nine concession licences on offer to private companies in a competitive tendering race to run Portugal’s new motorways have generated considerable interest.
The government launched the open public competition for stretches of motorway in the Trás-os-Montes, Douro Interior, Baixo Alentejo, Baixo Tejo, Litoral Oeste and Algarve Litoral earlier this summer. However, despite competition being fierce, the total estimated investment that the Ministry of Public Works will have to pay on construction has reached a staggering 2.5 billion euros, 40 per cent above original government estimates of 1.8 billion euros to build the roads.
A Ministry of Public Works source told national newspaper Público that the amounts announced by the government for the costs of construction, equipment and land expropriation were “merely estimates based on preliminary projections which were used when the competitive tendering bids were launched”.
The proposed costs from the various interested construction companies involved also take into account the risk factor inherent in such large-scale construction projects.
The competitions were launched by Estradas de Portugal (EP) which would then sub-let the road management out to concession companies which would pay a percentage back to the government from toll receipts.
For example, according to the economic business model worked out by EP, the length of motorway through the Trás-os-Montes would garner an annual income of between 18.7 and 23.5 million euros. The Ministry calculated the estimated receipts based on current EP receipts divided by the concession licence period of 30 years. Similarly, the Douro Litoral motorway would generate an average annual income of 6.9 million euros.
The total estimated receipts to the government per annum for all nine roads planned for the country stand at around 61.6 million euros.
The government accepts that its costs in constructing the roads would be higher than its receipts during the first 30 years but stresses that EP concessions would run consecutively for 75 years, whereby the government would be in profit in the second – 45 year period.
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