Spotlight: Private projects face long wait in Chile’s concession system

Projects proposed by the private sector in Chile face a years-long wait before being tendered under the country's concessions system, as the public works ministry’s (MOP) concessions council has a backlog that includes projects that have remained for up to 14 years without being tendered.

As of December 31, there were a total of 47 active private initiatives in the MOP's portfolio, with the oldest dating back to 2008, documents show.

While some do appear in the ministry’s upcoming tender schedule, 24 submissions remain stuck in the presentation stage.

This initial phase involves a preliminary assessment from the concessions council, which decides whether or not the project can be declared of public interest. 

Some of the projects that have yet to surpass this step include:

Atacama potable water desalination plant (US$652mn): submitted by Suez Medioambiente Chile in October 2018. This project involves the installation of a reverse osmosis plant with a production capacity of 1m3/s in Caldera (Atacama region), which would also serve the city of Copiapó and neighboring Chañaral.

In June 2021, the concessions council stated that the project potentially overlapped with a similar project carried out by sanitary services concessionaire Econssa, which began operations last month.

The following month, the council said it would wait for a report from the legal division of the MOP’s concessions office before deciding, but the issue has not advanced since then.

Puerto Montt public transport system-electric bus corridor and Mirasol cable car line (US$45mn, pictured): Presented in August 2020 by Sociedad Concesionaria Teleférico Puerto Montt, which has a separate US$50mn proposal for another cable car line in the city of Puerto Montt (Los Lagos region), which has been already been declared of public interest.

This second proposal involves a 2.34km cable car line with five stations linking the city’s Angelmó avenue on the coast with Mirasol avenue, plus an electric bus corridor which would link it with the city center.

The MOP has not reviewed this proposal as yet.

Water highways: Two competing proposals to build so-called 'water highways' to transport water from rivers in southern Chile to drought-stricken valleys in the north were submitted in 2019. 

ViaMarina’s US$8bn Aquatacama project would consist of a 2,030km pipeline that would run underwater along the coastline, bringing water from the mouths of three rivers (Biobío, Maule and Rapel) and then pump it to 12 areas in the north.

The other was presented by Reguemos Chile and represents a US$30bn investment, and unlike Aquatacama, the 3,900km pipeline would be on land.

However, it should be noted that since then Chile’s southern regions, normally considered to be rainy, have also started feeling the effects of the drought affecting the country.

However, all of these projects are unlikely to advance for now, as the concessions council, in its most recent meeting, declined to address any proposals, saying that “there are no private initiatives with the necessary level of development to be presented to the council.” 

ONE STEP ON

The remaining 23 private initiatives in MOP’s portfolio are in the proposition stage, which follows the declaration of public interest. 

This phase entails feasibility, environmental and demand studies, among other requirements, after which the MOP will decide whether it can be carried out as a concession.

Some of the projects at this stage are:

Santiago-Valparaíso high-speed train: As with the water highways, there are two competing initiatives bidding to build a high-speed railway between capital Santiago and the port city of Valparaíso.

While the project has attracted great interest, including from the incoming government, which is due to assume power next month, demand studies had to be halted because of the pandemic.

Viña del Mar-Reñaca light train (US$217mn): A tender is scheduled for the third quarter of 2023. The project, submitted by Anifex in 2017, entails a 10.5km light rail line with 13 stations that will link Viña del Mar (Valparaíso region) with the beachside neighborhood of Reñaca.

Santiago airport light train (US$425mn): A tender is expected to be carried out in the second quarter of this year. This project, proposed by Engie in 2017, consists of a 12.5km line that would link Arturo Merino Benítez international airport with the Santiago Metro system. 

Entrelagos highway (US$149mn): This is one of the oldest projects in the MOP’s portfolio, as it was submitted in 2008. It is expected to be tendered in late 2023. It involves works on 112km of the Ruta 215 CH highway between the city of Osorno (Los Lagos region) and Puyehue, near the border with Argentina.