Shadow tolls will cost the government US$80 million this year

The executive director of Alianzas Público Privadas warned that the solution to the contract for the construction and management of the Autopista del Nordeste (Juan Pablo Segundo), will result in a high cost for the Dominican State and pointed out that this year alone the Government will have to pay some US$80 million to the concessionaire company.

Sigmund Freund said that the conversations, between an official commission headed by Finance Minister Jochy Vicente and the current executives of the company, are at an advanced stage, and possibly by the end of this year an agreement could be announced.

Freund pointed out that any agreement reached is less bad than continuing to assume the enormous sacrifice represented for the State by the surplus toll, which this year alone the government will have to spend US$80 million.

Interviewed by Hector Herrera Cabral on the program D`AGENDA broadcast on Telesistema channel 11, the official recalled that last February 27 President Luis Abinader said that he was taking steps to resolve the heavy burden that the Northeast Highway implies for the Dominican government.

“That is why a negotiated solution is being sought, which I must say is very advanced, we are very hopeful that it will be solved this year as the President announced, and yes, I must recognize that whatever the solution is, it will be a costly solution for the Dominican people,” said the executive director of the DGAPP.

He added that it is a contract that is very well “tied up” in favor of the private agent for any negotiated exit from it. “We are trying to look for the best scenario so that the private agent understands that a confrontation and a confrontation with the Dominican State over this project is not in its best interest, and I believe that we will reach a solution in the coming months for the good news of the Dominican people,” he argued.

Consequences
Freund specified that, if no agreement is reached and the payment system to the company continues as at present, it would be paying an additional US$1.2 billion at the end of the contract currently in force.

“And I don’t know if you know that this highway cost US$300 million, and we are talking about paying four times more in addition to what has been paid, so, however costly the negotiation may be, it will be much better than maintaining the current situation”, he explained.

He clarified that the current concessionaire of the Autopista del Nordeste was not the one that signed the original contract, since it is a Colombian company that acquired another of the same nationality, which among its assets was said highway.

He assured that they are well aware that it is unsustainable to maintain this contract under the current conditions, and they have reached a degree of understanding to such an extent that they are discussing the possible exit of the aforementioned contract.

2022, a good year for PPPs
The executive director of the DGAPP, Sigmund Freund assured that next year between six and seven important projects will start under this modality.

“We foresee that by 2022 between six and seven projects can be launched under the public-private partnership modality”, insisted the official.

Among them, he mentioned electric, road, port, tourism and urban mobility projects, and assured that they are investments that will change the face of the country’s large cities such as Santo Domingo and Santiago, and the connectivity of the Dominican Republic.

“These projects will generate a large number of jobs and movement of economic resources, because we are talking about the fact that construction is what most dynamizes the economy,” Sigmond Freud emphasized.

Freund explained about the need to promote PPPs indicating that the Government does not have the resources to execute them, although he made it clear that these alliances must be made within the framework of transparency that characterizes the administration of President Luis Abinader.

“All those investments that are required the Dominican State does not have the financial capacity required to execute them on its own, and even less so at a time when we are living in the midst of a pandemic that has impacted the Government’s public finances,” Freund recalled.

Among the projects expected to start next year are the Amber Highway, the Pedernales tourism project, the works at the Port of Manzanillo, the construction of a tourist port in Samaná. “2022, will be a great year for the concretization of important public-private projects,” concluded the official.

Leave a Reply

Your email address will not be published. Required fields are marked *

1 × 3 =