After bad experiences with concessions, the Ministry of Public Constructions seemed to have a doubt to handle public roads and highways. Now, the definition seems to appear under the policy of delegation instead of direct concession. The final effect is the same: an entity different from the State is in charge of managing public roads under authorized fares, but the procedure to get this goal is not the same.
Joint Companies, entities created by Public Sector and private partners (usually investors or strategist managers), are the ones entitled to deal with this figure. Administrative Law, Principles that rule Public Contracts and also Companies Law give Local Governments (Provinces) the right to associate themselves in order to ask Central Government (Ecuadorian State) for this kind of delegation procedures. When Central Government, it means the Ministry of Public Constructions, qualifies the feasibility of the project specially under the rule to not get funds from public budget and to be financed only by private investors, it authorizes to share a Joint Company with private parties. Then, this Joint Company is responsible for keeping the road under excellent conditions and for handling other businesses related to the project: publicity, assurance, gas stations, among others.
The first experience of this figure is going to start operations next month and everyone feels comfortable including local towns which usually have not had these ways for development. The main challenge will be to have efficiency for tariffs, provided that currently is considered a driver saves US $ 0.20 per 10 kilometers plus safety, security, time among other facts.
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