PPP – N4 Toll Concession

The N4 was financed through a combination of equity finance by the private partner, plus loan finance from a range of the major financial houses in the sub-continent – primarily from South Africa. A percentage of the finance was also provided by the Development Bank of South Africa and a mine workers pension fund. Both governments agreed to underwrite or guarantee the debt in case of TRAC’s inability to service the loan.

N4 Toll Road from South Africa to Mozambique

South Africa has an important experience in PPP projects, involving about 300 such projects on the national and provincial levels since 1994. The South African National Treasury, the body that deals with PPP projects, developed a PPP Manual to guide projects of this nature. The manual defines a PPP to be a contract between a public sector institution and a private party, in which the private party assumes substantial financial, technical and operational risk in the design, financing, building and operation of a project.

N4 Toll Route

The case study describes the N4 Toll Road Project, a brownfield toll road concession of 630 km running from Pretoria, South Africa’s administrative capital, to Maputo, the capital of Mozambique and a deep-sea port on the Indian Ocean. The project was structured as a public-private partnership (PPP) between the governments of South Africa and Mozambique and a private consortium for a 30-year period. The project is the first cross-border transport PPP project in Sub-Saharan Africa and the first brownfield PPP of this scale in South Africa.

A Retrospective on the Mexican Toll Road Program (1989-94)

In 1989, Mexico initiated a private toll road program of fifty-three concessions involving an investment of about US$13 billion in limited recourse financing over the period 1989-94. The program more than doubled the size of the national toll road network, but miscalculations of investment costs and overoptimistic forecasts of operating income undermined the viability of the toll roads. An already bad situation was made worse by the Mexican currency crisis of December 1994, and the private toll road initiative came to a virtual standstill.

Colombia: Ruta del Sol

Good highway infrastructure is essential to economic develop-ment. The Colombian gov- ernment backed this concept in July 2010 when it awarded the concession of the third and final section for the construction and expansion of the $2.6 billion Ruta del Sol highway. This 1,071 kilometer road connects the capital, Bogotá, with other large urban areas of the country’s interior and Caribbean coast. When completed, Ruta del Sol will help foster the country’s competitiveness in these sectors and improve road and travel conditions for pas- sengers and goods.

Toll-road concessions: The Chilean experience

Over the past decade growing demand for infrastructure has driven the private provision of roads, power, telecommunications, water and sanitation, and other public services in developing countries. Governments short of resources have sought alternative methods of financing transport improvements without affecting their fiscal situation. Charging tolls, too, has become an attractive option for managing traffic on increasingly congested roads.