The status for the construction of the Escuintla-Puerto Quetzal Highway (AEPQ) under the Public-Private Partnerships (PPP) scheme is in a “conciliation” phase between the Guatemalan Highway Consortium (Convía) and the authorities of the Ministry of Communications, Infrastructure and Housing (CIV), which is the contracting entity.
In November 2023, the members of the National Council of Alliances for the Development of Economic Infrastructure (Conadie) learned of the report sent by the CIV that included the Definitive Engineering Study (EDI) and everything indicated that the file would be known by the current government authorities, but it was not approved. Convía also sent a letter to the CIV in December 2023 expressing its intention to initiate an arbitration process, which remains in force.
Sandro Testelli, president of Marhnos Guatemala (which is part of Convía), provided an overview of the current situation of the AEPQ and the process that is being carried out:
What is the status of the AEPQ at this time?
We have been reconciling the process with the Ministry of Communications, Infrastructure and Housing (CIV), regarding the transition of the file. Let’s say that there is a will and guideline to have the project aligned and agreed on technical issues as soon as possible.
There is an entire process that we have defined to cover the technical and legal parts, which can be an agile process, but consensus must be reached. I believe that there is will and another vision of the current government and it is precisely what we were looking for in some way, to cover the spaces that are pending to start the work.
What phase were they in? EDI and observations?
The observations and recommendations have already been seen and analyzed; and we already have a consensus on what needs to be reviewed and done to align the contexts that are requested. These are formal processes and there will be others with much more specific considerations, but at the end of the day and in general terms, it is a project that can be buildable.
Was the EDI resubmitted?
No. What we are doing is reconciling the observations and recommendations that were presented at the time.
There is a letter that Convía addressed with the intention of initiating an arbitration process for the contract. What can you tell me about it?
It was in a context derived from the transition and uncertainty that was generated in recent months. It is not an open file, but rather a notice of the beginning of a process. In other words, it is not an issue that is already present in an established legal context. The intention is to open a space for conciliation within what is appropriate for the protection of the capital of the external investor.
Has this notice been disabled or is it still valid?
It is still in force, but the conciliation process is on the right track. We believe that spaces are opening up.
What future do you see for that conciliation?
There is a clear will from everyone, from the consensus with Conadie, to move forward with the process.
Is there any risk that the work will not be executed?
Our engineering complies with what the contract demands, which are basically the scope, regulations, and user safety. Without a doubt, any project can be observable or recommendable, but I believe within the space that the contract allows us, the scope of our engineering covers a large percentage of the process.
And as for the times?
So far the times are what the contract demands. The idea is precisely to have these processes as soon as possible, so that we enter the rhythm that the schedule demands.
When could all these doubts be cleared up and what does it depend on?
10 (engineering) specialties are being reviewed and once that is finished, we would enter a stage of conciliation, financial closing and everything that the start of the works implies. Then there will be a validation between the parties and finally, enter the financial closing process.
Work does not start
The Guatemalan Highway Consortium (Convía) won the tender to build and manage the Escuintla-Puerto Quetzal Highway (AEPQ), but the Ministry of Communications, Infrastructure and Housing (CIV), as the contracting entity, has failed the final engineering study ( EDI) on three occasions. Without the endorsement of the EDI the work cannot be executed.
- In November 2021, Congress awarded the PPP contract to Convía.
- On August 13, 2022, the CIV formalized the contract for the start of the works of the project “Rehabilitation, Administration, Operation, Maintenance and Complementary Works of the AEPQ with toll collection.”
- Conadie set October 6, 2023 to present a correction to the EDI for the start of the works.
- On November 3, the CIV informed Anadie that the EDI was not approved.
- On November 27, Conadie requests a new technical report from the CIV.
- On March 15, 2024, Convia executives indicated that they are in a conciliation process with the new CIV authorities.
Technical data
- The Central American Business Intelligence -CABI- entity carried out the study “Economic and Social Impacts of the Escuintla – Puerto Quetzal – Highway (AEPQ)”, which indicates that traffic on a road in poor condition generates additional expenses for users:
- Q400 million annually in wear and tear on vehicles, tires and repairs.
- Q1,417 million annually in fuel associated with longer transit time.
- Q405 million annually for opportunity cost.
- Incalculable costs due to traffic accidents and loss of human life.
- Q24.01 is the current cost (for a light vehicle) to travel on the highway to Puerto Quetzal. (The proposed toll would be Q15).
- Q61.65 is the current cost of a light-duty transport vehicle for using the road under current conditions. (The toll would cost Q45).
- It costs Q79.87 for each heavy cargo transport vehicle to travel on the highway to Puerto Quetzal (Q75 of toll would have to be paid at the AEPQ, operated by the successful bidder, if the project is executed).
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