The Dominican state has 17 years to pay for one of the most expensive projects the government has undertaken in its entire history: the “shadow toll” of the highways connecting Santo Domingo to Samaná.
The ambitious work promised “great progress” for the Dominican population through the promotion of the northeastern tourist area, but the price to achieve this was much higher than estimated.
The Autopistas del Nordeste and Bulevar Turístico del Atlántico motorway concession, owned by Colombian companies Autopista del Nordeste SA and Boulevard Turístico SA, has cost the country high millionaire for vehicles that don’t even pay tolls.
On February 27, the President of the Republic of Luis Abinader, in his initial reporting to the National Assembly, referred for the first time to the “shadow toll” as something “infamous”, which represents great economic weight for the country, and pledged to go through legal channels. to “find a solution”.
According to the president, the country has disbursed an amount of RD $ 26,835 million for 13 years as part of the minimum income it must guarantee to the concessionaire.
For 2021, Law 237-20 of the General State Budget has allocated an amount of RD $ 4,930.9 million for the “shadow toll,” but Abinader confirmed that the country will be paying RD 7,000 million for the current year. concept.
The bottom line is that the total cost of constructing, operating, and maintaining both highways was about US $ 305 million, which equates to RD $ 17,674 million, but the Dominican government has paid nearly double their true value and “Shadow Toll” the country will wait until 2038.
“If we had followed this modality, we would have paid nearly six times the true value upon completion. This is simply unacceptable, ”the president told the National Congress.
Following this public complaint, the next step the government took was to hire attorney Emmanuel Esquea Guerrero on Feb. 2 to analyze the concession contract and issue a legal report to President Abinader so that he can make the decision final.
When Guerrero contacted LISTÍN DIARIO, he pointed out that when he was given the power of the Presidency of the Republic to study the matter of the “shadow toll”, he only knew what had been published in the press.
While Antoliano Peralta, legal adviser to the executive branch, noted in Telemicro’s Morning Program, channel 5, that the government chaired by Abinader “is always trying to find a consensual, negotiated solution that does not harm the state and only if it is not possible., then we go to arbitration or legal conflict ”.
Why “shadow toll”?
The project that has agreed on the construction and management of the highways is a road concession, an instrument through which the state gives a private company a contract by means of a tender for the construction, operation and maintenance of a passable section for a period, and in return the administration. The public undertakes to pay with the toll collected for the work.
In the case of the Autopista del Nordeste and the Boulevard Turístico del Atlántico, Colombian companies agreed to directly finance 80% of the total cost of the work, ensuring its construction, maintenance and operation, as long as the Dominican government provided them. the right to collect 100% of the toll on both routes continuously for 30 years.
But while everything promised stability and tremendous development for the country, the “small print” of the contract included a clause requiring the government to pay a “guaranteed minimum” to the concessionaire to “protect the investment.”
The so-called “shadow toll” stems from the existing shortage in the flow of vehicles traveling on the road, which is why the government has to pay billions of pesos as the planned difference to meet the contract.
The amounts accrued annually for this ‘ghost’ toll do not include the millions that these companies collect directly from the various tolls in Marbella, Naranjal, Guaraguao and Catey, the prices of which are RD $ 2,170 if it is a round trip in is a category. I am vehicle.
If, on the other hand, it is a return trip of a category IV heavy vehicle, the amount payable scales to RD $ 8,114. But in addition to having absolute control over everything that passes through the toll, Autopista del Nordeste, SA and Boulevard Turístico SA have also secured the payment of the tax on the transfer of goods and services, known as ITBIS, as an “additional contribution”. . .
This last part is defined in agreement number six of the contract which states that “at the date of presentation of the offer in November 1999, the current regulation regarding ITBIS was not in force, in case the concessionaire was obliged to Applying ITBIS in force since January 2001, the grantor, ie the State, is obliged to assume the difference as an additional contribution ”.
This is how the ‘shadow toll’ was born
The signing of the contract went through the hands of the governments of the Dominican Revolutionary Party (PRD) with former President Hipólito Mejía at the helm, and the Dominican Liberation Party (PLD) led by former President Leonel Fernández in its second and third terms.
The road concession between the Autopista del Nordeste, SA company and the Dominican state came into being on December 8, 1999, when the Colombian consortium won the award of the law contract through an international public tender for the construction and operation of the Santo Domingo – Cruce Rincón highway. Molinillos.
On January 22, 2001, the then Secretary of State for Public Works and Communications (SEOPC), represented by Miguel Vargas Maldonado, authorized Colombian shareholders Grupo Odinsa SA, Grodco SCA and Consorcio Remix SA to also be part of the concessionaire.
On July 18 of the same year, the contract “Construction of the Santo Domingo – Samaná highway under the administration system of the toll system” was signed between Vargas Maldonado and the representative of the concessionaire, Luis Fernando Jaramillo Correa, for US $ 125,516,542. .
It was agreed that the total duration of the contract would be 33 years and three months, of which the first three months would correspond to the settlement period of the contract, three years would be spent on execution of the work and the remaining 30 years. to the operation and maintenance of the highway in the hands of the private entity.
The contract states that “if the value corresponding to the revenue from toll collection during two months of full operation is less than the guaranteed income for this period, the Grantor (Dominican government) will make up the difference to the concessionaire.”
This clause which opened the doors to the guarantee of the “shadow toll”, with the aim of “preserving the economic equilibrium of the project”, was also approved in the minutes signed in August 2005 and January 2006 by the former Minister of Public Affairs. To work. , Manuel de Jesús (Freddy) Pérez, during the tenure of Leonel Fernández.
After signing, the millionaire project was divided into two phases: the first consisted of the construction of the Northeast Highway and the second for the construction of the Atlantic Tourist Boulevard and the rehabilitation of the highway that runs from Nagua to Las Terrenas.
This second phase was approved by Fernández and the National Congress on August 23, 2007, and on November 22 of the same year it was signed between the former Secretary of Public Works Víctor Díaz Rúa and the company Boulevard Turístico SA, whose shareholder structure and resources are the same as that of Autopista del Nordeste, SA
Although the agreement corresponded to different mandates for both works, they were launched during the Fernández administration on June 30, 2008 and November 2011 respectively.
In a letter sent to the National Congress in 2008, former President Fernández stated that under the financial model of the work, the Dominican state should generate $ 900 million in revenue over the life of the contract.
It was based on a ‘traffic survey’
The approval of the project uniting the south and north-east of the country was based on the “Certification of the Demand or Traffic Model” issued in 2005 by the international traffic consultancy Louis
Berger Group, whose research was supported by a report from the Spanish transport planning company Auding SA
As recorded in the minutes of agreement No. 8 of the concession contract, the study was presented by Autopista del Nordeste SA “to minimize the risk of uncertainty in the project’s traffic revenue forecasts.”
This ‘traffic study’ predicted that the Dominican state would only pay a ‘shadow toll’ for seven years, from its inauguration in 2008 to 2015, as after that time ‘the flow of vehicles would be appropriate’.
But 13 years after commissioning, the numbers paid to businesses continue to rise, and this year 2021 promises to be one of the ‘most expensive’ years for the Treasury.
Complaints
According to the report “Fiscal Autopsy: Evaluation of the Dominican Government’s Expenditure and Revenue for the Guarantee of Rights”, prepared by Oxfam Dominican Republic in 2019, in the first eight years of operating the highways, private capital has lost its investment doubled.
“This contractual modality represents a significant drain on the Treasury’s resources, aside from the out-of-pocket cost to citizens in general, which is already more than RD $ 2,000 for a tour,” the document reads.
National District Senator Faride Raful has described the Northeast Highway contract as “leonine” and also pointed to President Abinader’s commitment to review it.
Negotiation attempt
A revision of the concession contract had already been proposed on previous occasions, considered by many to be “abusive”, but no government has achieved this.
On December 15, the Ministry of Works reported that it was in a “negotiation process” with the consortium of companies to negotiate an agreement that would allow for a “significant reduction” in the cost of the “shadow toll”.
However, an article published on the same day by LISTÍN DIARIO, under the signature of journalist Patria Reyes Rodríguez, states that unofficially a source affiliated with the ministry stated that “no final agreement has yet been reached with the company”.