Uruguay to ditch PPPs for new road projects

Uruguay’s public works ministry (MTOP) will not use a PPP model for new road projects, as they take “too long” and instead will be use construction, rehabilitation and maintenance (CREMA in Spanish) contracts for the US$1.9bn in investments planned for the next five years.

Despite this, ongoing PPP road projects that entail US$658mn in investments will continue, public works minister Alberto Heber told the congressional budget committee, Televisión Nacional Uruguay reported.

To finance the CREMA contracts, new toll plazas will be installed “especially on routes that go towards the coast,” Heber said.

The CREMA contracts, already used in Paraguay, will involve two years of construction and 10 years of maintenance.

PPP’s will not be used unless the mechanism is reworked, Heber said in a press release.

Public works undersecretary Juan José Olaizola told daily El Observador that the CREMA contracts “are kind of smaller and easier to draw up than a PPP” and they would also be easier to finance.

Two road PPPs are under construction in Uruguay, circuit 1 (US$93mn) and circuit 3 (US$152mn), while one was finished and four others are waiting to be awarded, according to the finance ministry, although MTOP said they would be finished.