PRIVATE SECTOR IS THE KEY TO MODERNIZING INFRASTRUCTURE
Concessions to foreign operators will bring in the resources, experience, and technology needed to enable Ecuador to compete more effectively

For Ecuador to achieve its economic potential, modernization of the country’s infrastructure and public utilities is crucial, and foreign firms will have a key role to play in bringing it about. The government is seeking to attract private companies that can provide the resources, experience, and technology needed to put the country on a more efficient and competitive footing.

Private operators are currently being licensed to manage 13 of the 18 electricity distributors and two state-run telecommunication companies in the latest stage of a concessioning process that extends to roads, bridges, ports, railways and international airports, drinking water, and sewage.

Improving Ecuador’s roads, many of which are unpaved and impassable in bad weather, is a matter of priority. Concession projects are already having an impact on the network, with the rehabilitation and upgrading of local arteries to improve market access. One of the most important projects is construction of the Ruta de Integración Nacional; a high speed freeway linking Ecuador’s two most important cities, Quito and Guayaquil.

Private sector involvement is essential to major projects to upgrade Ecuador’s international airports at Quito and Guayaquil.

The concession for the development of a new US$550 million airport to replace Quito’s Mariscal Sucre airport was awarded to a private consortium in 2002. The Quiport consortium will design, construct, finance, operate, and maintain the new airport, which is expected to be operational by late 2007.

The airport will be developed and operated under a 35-year concession, and its administration will be in the hands of an independent agency—La Corporación Aeropuerto y Zona Franca del Distrito Metropolitano de Quito—established under the Municipality of Quito.

Guayaquil airport prepares for take-off
Guayaquil’s Simón Bolivar International Airport is to be transformed with the building of new passenger and cargo terminals as part of a US$90 million investment project.

The work and subsequent management of the airport is being concessioned to a private company by the Airport Authority of Guayaquil (AAG), which took over responsibility for SBIA in 2002. The concessionaire will undertake an investment program to improve the airport to a level of service comparable to the main international European and American airports.

At a later stage, the concession may be extended to include the construction, operation and management of a new international airport at Daular.

NICOLÁS ROMERO SANGSTER General Manager of the Airport Authority of Guayaquil

Nicolás Romero Sangster, AAG’s General Manager explains, “The concession is to manage the operations for 15 years, with two clear objectives, the improvement and upgrading of the current airport, and the construction of the new international airport.”

Within a 25 year period, AAG hopes to see an increase in passenger traffic from the current 1.8 million a year to 5.5 million, comprising 3 million international and 2.5 million domestic passengers. “We are aiming for a competitive and efficient airport system, with a high technical level in its infrastructure and equipment, efficiency, and quality of service, without transferring the investment costs to users and consumers,” states Mr. Romero.

The concessionaire will assume the management of the airport, with the exception of air traffic control, and receive all revenue derived from aeronautical and non-aeronautical activities. “They will have freedom in the commercial aspect of the airport. This has a great potential for development, since a mall can be built. Currently only 18% of the income comes from commercial activities, such as duty free. This could rocket to 50%, if correctly managed.”

Guayaquil is well-placed to become a regional and mid-Pacific air traffic distribution center. “What we can do, is create the best possible situation for that to occur,” concludes Mr. Romero.