SBU North America

ROADIS North America is present in two major markets: Mexico, where we successfully operate two very important toll roads and are also looking for new opportunities; and the United States of America, a strategic market for ROADIS, where we are keen to participate in new projects.

ROADIS USA has extended operational expertise in the sector. Through its affiliates, ROADIS USA is an experienced long-term road manager and operator with a proven record of maintaining and improving the operational excellence of its assets. Also, we are willing to undertake long-term partnerships with other US and global transportation investors. In addition, we have extensive experience in the construction of highways and bridge structures by hiring and supervising EPC contractors.

As well as actively participating in Public Bids, we are developing an Unsolicited Proposal Strategy to develop projects in the main congested areas in the USA, while seeking long term relationships with Public Transportation Entities to meet their Infrastructure Master Plan requirements.

In the United States our focus has been on the search for new investment opportunities. We have strengthened our local team, distributed throughout several areas of the country that are particularly attractive to our business.

2017 has continued the trend of the many successes that ROADIS achieved in 2016, with another productive year for ROADIS in Mexico; the traffic, revenues and liquidity on the two toll roads that we manage in the country have experienced a strong growth of up to two digits for the second year in a row.

These positive results have been achieved despite the uncertainty generated throughout the year due to the difficult renegotiation of NAFTA with the United States and Canada—still not concluded today—and the pre-electoral climate in Mexico, where presidential elections will take place in July 2018.

The devaluation of the Mexican peso and high inflation are the two biggest challenges faced by our assets in Mexico, since they reduce the payment capacity of the users of our toll roads and may affect the growth of traffic in the country. However, the signs during the first months of 2018 are positive, with traffic behaving favorably on both of our highways.

Regarding development opportunities, all the candidates for the presidency are proposing new infrastructure programs that will be developed from 2019 and 2020 onwards. Therefore, we will carefully analyze all of these programs in order to position ourselves in projects that fit the ROADIS investment profile. In this context, we will also pay attention to the opportunities that arise in the private secondary market to expand ROADIS’ portfolio in the country.

Experience shows that in election years, there’s usually a significant deceleration in public tenders and investment, which has already been reflected in foreign direct investment data in the last quarter of 2017. In addition, the polls predict a change of government in Mexico, which also feeds, to some extent, the unpredictability in public and private decision-making.

Whichever government is elected will most likely have development of the road network in the country among its priorities, either through the development and construction of new highways, or through the privatization of some of the main toll roads that are currently in public hands. All these plans can be a great opportunity for us. ROADIS will therefore be on the lookout to try to capture some of these opportunities by leveraging its knowledge of the country.

In this context, ROADIS confirms its commitment to remain in the country with a sustainable, transparent and solid operating scheme.

For 2018, Mexico’s transport and communications ministry (SCT) has a total budget exceeding 77.25 billion pesos.

In terms of road infrastructure, the budget consists of: 15.21 billion pesos for the construction and modernization of 423.2 kilometers of the federal network; 1.36 billion pesos for the release of rights of way; 559.5 million for pre-investment research; and 5.26 billion for service provision projects.

Regarding the conservation and maintenance of the national road network, a total of 11.07 billion pesos will go toward the reconstruction of 6 kilometers and 21 bridges, periodic maintenance on 2,100 kilometers and routine maintenance on 40,262.4 kilometers.

2,103.9 kilometers of the road network will be covered under a new funding scheme of multi-year road maintenance contracts. Finally, 10 projects will be covered under the Public-Private Partnership (PPP) scheme.

The positive performance of traffic is due, according to the rating agencies, to the good performance of the country’s economy and high trade flows with the United States. Due to these factors, it is expected that the official ADT (average daily traffic) for 2017 will maintain the trend that has been observed since 2014.

For 2018, we must closely follow the outcome of NAFTA negotiations, car sales and the price of gasoline, since adverse changes in these variables could lead to very conservative ADT growth rates for 2018 if we compare them to the growth rates we have seen in the past four years. Nevertheless, the solid foundations of the Mexican economy should support resilient traffic performance.