Chile has launched a hunt for investors willing to pour money into building roads and bridges beyond the country’s major cities. This comes barely a month after President Michelle Bachelet unveiled US$28 million program to build road infrastructure across the country.
According to the Chilean Construction Chamber (CChC), the South America country needs to invest US$58 billion in infrastructure over the next four years.
Last week Chile formed an expert committee to advise the government as to how it can find alternative sources to finance its infrastructure programs. By January next year, the expert committee will suggest ways the government can garner enough money for its developmental programs.
In recent decades, Chile has excessively used concession schemes to finance the construction of major roads. Under such schemes, private firms finance and build given projects and then operate the infrastructure for a set number of years, recovering their investment by collecting tolls from users.
International investments experts, such as the World Bank, have often criticized Chile’s concession schemes, saying they will saddle the government with a huge burden of debt.
Analysts say Chile’s railway network is no longer growing and buses are the main means of long-distance transportation. The bus system covers the entire country, from Arica to Santiago and Punta Arenas.
This year alone, according to Business News Americas, Chile wants to award seven major infrastructure projects worth about US$1.6 billion, including the expansion of Santiago International Airport.
Infrastructure development projects currently account for 2.5% of Chile’s GDP, but President Bachelet wants to increase this ratio to 3.5%.