ASi" kUCTURE FlOR DEVELOPMENT

V
Box 5A A successfl-firtt
step in Guatemala
In January 199Z Empresa El4ctrica de Guatemala SA.. :maretrateWhpwavailabilityfallsbeow50 per-
-EFG.A) the major poerdistributotinGuatemala- cent, FQP wi pay EEGSA penalties The ageement re-
-sgned a fifteenyear power purchase agreement with a quires the proect to proide power at a competitive
-loca powegenerating pn Almnst immediately pnce.- Under current assumptions of capadly utliion,
-: -; :- the company sold its intert in the proiect to Enon which allow for deterioration of performance over time,
* Power Development: Corporaion, a subsidiay of a EEGSA will pay an average of $0.07 per kilowatt-hour
large US. natural gas company with intersts in several over the life of the projed-which is about the kag-run
--- zindependent power projects. The project consists of margn cost ofbulk power in Guatemala
-* - twenty 5-megawatt generats mounted on a barge at PQP has cut some of its risks by entering into con-
Puert QuetzaL which operate as a base-load planL The -tacts for tunkey mstallabon, operatins and mainbeprct
ineases Guatemahas generating capacity by 12 nance, and fuel supply The plant started operating in
percnt and its effective capacty by about l5 percent late Febuary 1993, on schedule and within budgeL A re-
The prces in the power phase gnentare d- viewofearlyoperationsindicates tatPQPhasachieved
nominated in US- dollas The ageemet rmeq high levels of available capadty, that revenues and net
EEGSA to provide the project company, Puerto Quen income agree with foeasts, and that convertg quetza-
: Power Corporation. (PQP), with wedey fixed capacity Ies into US. dollarshasnot beena pniblem.Afterwatchpayments,
provided thatPQPmeets minium avallabil- ing EESA sexperiene with PQP, the ntituto Nacional
ity standanl, weeky energy payments, with a mini- de Electriflcac6n-a goverment-owned enterprise remum
guaranteed purcbase of 5D percnt of output and spunsibIe power generatin transmission, anrd reta-Il
additional collateral and doumentary support to secure distribution outside Guatemala City-has began negt-
EEGSA%s obEgations to PQP. EEGSA has the option to ating other power purcase agreements with indepenpay
NP in U.S dolars or quetzales at the prevailing dent producers.
TOLL ROADS. Today's resurgee in toll-road con- basis of traffic flows), as proposed in Austraa and
struction reflects practical realitr: roads are needed the United Kingdom.
for economic development, but the financial and Governents and the pxivate sector have had
managerial capacity of the public sector is limited, limited expeience in dealing with each other as
In the past five years, Mexico has added an impres- equal partnexs on complex toll-road projects. Misive
4,000 kilometers of new toll roads at a cost of gations have had to be renegotated midstream
$10 billion. Malaysia has the most exnsve pub- when a project's ambitious original goals were not
lic-private project in the developing world, the $23 backed up by adequate p:eparation. Sometimes,
billion North-South Toil MoWrway. China is plan- specific road segments were not viewed as dependnang
many ambitious toll roads-the 123-kilome- ing on the quality of other roads, and competing
ter, $1 billion Guangzhou-Shezen superhighway ministries failed to cooperate.
will cut through the heart of fast-developing The Mexican toll-road program illustrates the
Guangdong Province. Many other smaller toil dangers of launching a major initiative with multiroads,
bridges, and tunnels axe also being con-. ple objectives and insufficent preparation. The constructed-
tract terms failed to pin the responsibility for con-
In most cases, tolls charged directly to users do struction time and costs on the private project
not cover the full cost of roads. Governments grant sponsors, an omission of conditions that have since
land rights o encourage development made viable become the normL De facto flexibility in the concesby
the road (for example, shopping centers on fre- sion period allowed sponsors to shift cost increases
way exits of the GuangzhDu-Shenzen highway; see onto the consumer or the govemment Creditors
Box 5.5). Govemments also allow private toll-road (niaulay state-owned banks) failed to perform their
operators to share in the reveues of edxsting pub- normal appraisal and monitoring functions. The reliclv
owned. toll roads (as is the case for Sydney Har- sulting high tolls have held down road use, albor
Tunnel and the Bangkok Second Stage Express- though measures are now being introduced to inway).
They can provide capital grants to make caease usage (Bo 5.6).
projects financially attractive to private. entipre- However careful the preparation, conflicts can
nears and can offer "shadow toils to private opera- arise. In the Second Stage Expressway. in Bangkok
tors (tolls paid from government revenues on the the Japan-led private consortium and the Tlansport
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