Keep on trucking: President Uribe pushes for Colombia's most ambitious highway plan ever.

Colombia's highways are headed for an extreme makeover. President Alvaro Uribe has prepped to perform the surgery needed to modernize Colombia's vast network of highways. More than cosmetic, however, Uribe's plan is a kind of pavement bypass operation: A cross-country highway renovation project, known as Plan 2,500, will cost more than US$770 million and is the largest infrastructure overhaul in the country's history.

The plan began during the second half of this year and will run through 2009. The government feels it's an opportunity for the private sector to drum up some fresh business repaying highways in support of a pending free trade agreement with the United States. Updated roadways will ease the flow of goods headed to the country's ports. The project gets its name from 2,500 kilometers of highways to be paved or upgraded (the actual total comes to 3,160 kilometers). The road to success, however, is not without potholes. Accomplishing Uribe's vision will depend on the private sector. As if getting companies to take part weren't enough, security problems threaten certain areas where roadwork is needed, which could spook some contractors.

"We need this project urgently," says Juan Martin Caicedo, a former mayor of Bogota and current president of Colombia's infrastructure chamber. "Despite the problems, it's needed. There's a lot of work to be done." The government has long needed to do more to improve the country's infrastructure, Caicedo says. "Looking at the number of paved kilometers per number of inhabitants alone, we are behind Ecuador and Guatemala. And there are other frightening statistics: Colombia has only 400 kilometers of paved, double-lane highways."

Colombia's trucking association, Colfecar, has criticized management of the nation's highways, saying that improvements are long overdue. "The country is way behind," says Jaime Sorzano, Colfecar's president. While there are 350 kilometers of highway per million people in Colombia, he says, there are 860 in Chile and 900 in Mexico. Of the country's 16,600 kilometers of highways, only 12,000 are paved.

The big challenge, Sorzano says, will be to ensure that all companies granted concessions to build new roads will stick to their budgets. Private companies will decide the success of the plan, to be doled out through 100 contracts. The Transportation Ministry already has created a special commission made up of public- and private-sector officials, who will go over each proposal with a fine-toothed comb.

Hopeful. Security and business-related concerns notwithstanding, there's reason to be hopeful, says Gabriel Goldschmidt, of the International Finance Corporation, the private-sector lending arm of the World Bank. An outside consultant when Plan 2,500 was on the drawing board, Goldschmidt says the Uribe administration is up to the challenge of managing and monitoring the project, which is projected to boost economic output by 0.9% and create 360,000 jobs. "There are great opportunities for the private sector through traditional concessions and new types of associations with the public sector," Goldschmidt says. "The Uribe government has identified the logistical needs for a free trade agreement."

Trucking in Colombia is not easy. The highway system is a maze, complete with traps and pitfalls along the way; a drive all the way out to a port is an adventure. In 1995, Colombia's national planning department estimated that insufficient infrastructure generates cost overruns of $1.50 billion a year. Colombia simply does not have the logistics network it needs to handle such a free trade deal with the United States, observers note, under negotiation since May 2004. According to the government, 79% of cargo in Colombia moves by highway. But geographic conditions, poor roads and a lack of double-lane highways make trucking in Colombia costly. The cost of shipping a container to Asia from the Port of Buenaventura on Colombia's Pacific coast can be equal to what it would cost just to truck goods from Bogota to the port, according to Thomas Bueno, marketing director at Magnum Freight, a Miami logistics company.

Challenges aside, the government is betting on the project's success. "It's a strategic plan that has the backing of the World Bank and the Andean Development Corporation," says Mauricio Ramirez, general director of Colombia's national highway institute. "Half of the roads that will be improved are primary and tertiary while the other half are departmental and municipal." The government will pay cash to finance part of the roadwork and a $770 million Andean Development Corporation loan will cover the rest. "If we want to take advantage of the exportable resources we have, we need to get what we produce to the right places. The private sector needs to take responsibility for this plan," Ramirez says.

Private-sector involvement is possibly the biggest issue the project faces. Andres Uriel Gallego, Colombia's transportation minister, has staunchly defended the plan. "Construction companies awarded the contracts are just one piece of the puzzle. The companies will need cement companies and machinery subcontractors, for example," says Gallego. "If a piece is missing, things get complicated."

Still, Gallego is confident that private contractors will line up to participate, as the potential profits outweigh risks. "A chain reaction of growth will be felt all across the economy," says Federico Molina, president of Cementos Andina. It's too early to talk of any business coming from Plan 2,500. The first round of bidding at press time had not yet been made public, but Molina is certain there is money to be made. "In terms of equipment alone, there are enormous opportunities," says Molina.

Many of Colombia's roads need work, but one in particular stands out in terms of free trade--the highway that will connect Bogota with Buenaventura. It will pass through industrial and agricultural areas where truckers will pick up products to be exported, and it will be a big test for Plan 2,500. Traffic at the Port of Buenaventura has risen 28% since the administration launched an offensive against armed insurgents in the area, who once kidnapped truckers on the route. "Before, truckers' fears of coming to the port were very real. Things have changed greatly during the last two years," says Victor Julio Gonzalez, director of the port. "It's easy to reach us, and we are safe."

Last year, port traffic totaled 8.7 million tons, bringing in US$60 million. In 2001, before President Uribe's security crackdown, traffic barely reached 6.7 million tons. "Now exporters and importers alike are less afraid to make the 600-kilometer journey from Bogota to our port," says Gonzalez. "Highways are important, but if we don't keep our guard up, highway transportation could become dangerous again,"

DARCY CROWE * BOGOTA