Uruguay is to invest up to USD 400m in infrastructure work, reported El País last week.
Between 2016 and 2107, Uruguay’s “Transport and Public Works” Minister, Víctor Rossi, estimates that around 132 infrastructure projects will take place involving 5,857km of motorways and 2,282m of bridges. An investment of around USD 210m will take place this year, although the Minister was cautious about local contractors being able to deliver on time.
This government pressure on infrastructure investment and development is heavily linked to the recently-announced third cellulose plant in the country, this one by UPM. Again, the Minister gave his view that “the bottleneck is the railway”. He explained that UPM hasn’t conditioned its investment in Uruguay to the development of the railway system in the country (currently almost non-existent) but that this would give the investment more positive results. The Minister said that he’s not sure about how the development of a rail network would take place but that “it would have to be a very big job” that “not just anyone will be able to do”.
Some companies have shown interest in participating in these infrastructure projects, but it won’t be easy since investment of around USD 1b is needed.
Besides the railways, the country needs investment in highways and bridges, and expects to achieve some of these through PPPs. The Minister clarified that after finishing this year’s projects, his team will take some time off to analyse the PPP tool, which so far hasn’t yield particularly impressive results in Uruguay.
I personally see a lot of unrest from Uruguay’s agricultural sector, for example, with respect to the country’s road infrastructure. This was mentioned at the high-profile speech of Ricardo Reilly, outgoing President of the Uruguayan Rural Association (ARU) last month at ExpoPrado. He went so far as to saying that there are “areas of the country on the verge of a logistic collapse” due to this lack of state investment in highway infrastructure.
Infrastructure development in many areas, but particularly in highways, is critical to Uruguay’s growth and development. We’ll keep you posted on developments as we believe in win-win trade: if you can support this agenda by doing business here, we want to hear from you.
