Spain: Leader in Infrastructure Development

Expanding Beyond Spain

As early as the 1970s, Spanish companies began building on their experience in Spain and capitalizing on a shared language to begin constructing and operating toll roads in Argentina, then moving onto Chile, Colombia, and Brazil. Recently this Latin American market has begun to grow, with Spanish companies as the primary foreign builders and operators. After a rough start and an unsuccessful period with toll roads in the early 1990s, due in part to poorly developed government financial models, Mexico is once again opening the country to toll road concessions. In 2003 OHL was awarded the bid to build and operate a 135-kilometer toll road that will allow drivers to avoid the entrance to Mexico City.

Though the Spanish market slowed in private road investment as later governments once again assumed the responsibility for road development, in the past decade this model is once again gaining importance in Spain and around Europe. In 1992, the 15 members of the European Union signed a commitment called the Maastricht Agreement, which strictly limits the annual deficit of each member country to three percent of the gross domestic product. Due to this, in Europe, governments can no longer greatly increase their debt to fund major public works.

In the U.K., the government coined the term “private finance initiative” (PFI) to refer to a private company developing a public infrastructure, in which users pay the company directly. The government has said repeatedly that this is not simply to reduce public debt but rather that private companies have proven to be more efficient and effective. Many examples of PFIs have been opening in the U.K. Across the water in neighboring Ireland, Cintra and Grupo ACS won toll concessions, and Grupo ACS is the top contender for another.

Abertis, the primary toll road operator within Spain, recently more than doubled the miles of their operations by purchasing Sanef, a French state company operating motorways in the north and east in the country. “That network in the north of France connects with Belgium, the Netherlands, the U.K., and Germany, and we think it’s logical to try to explore future opportunities that may arise in those countries,” says Toni Brunet, communication director at Abertis.

As the concessions model had already proven successful within Spain, in 2003 the Spanish government enacted a new law extending beyond toll roads to allow PFIs to build and manage all types of infrastructure, such as airports and ports.