Infrastructure, Projects Tagged

Chile Infrastucture Pipeline for 2023

Chile’s concession system has come a long way over the last 30 years. Since 1993 when the first concession was signed, over 100 contracts with a total of more than US$27 billion have been awarded. It has also attracted 16 international companies to the Chilean market over the same time period. 

Highways, ports, rail, airports, hospitals, water infrastructure have all greatly improved under the concession model. So much so, that by 2005, Chile reached 19th place in the global infrastructure ranking. Since then, Chile has dropped in rankings, but the success of the concession program can be seen throughout the country with world class infrastructure. 

Fast forward to the present, last year (2022) was slow for concessions after the new government took power but this will change. For 2023, the government has set a goal to launch tenders for 14 concession contracts that have a collective value of US$4.6bn. If only 10 of those projects are started in 2023, this would create about 6,000 jobs adding to the 8,000 already hired by initiatives that have already been awarded. 

2023 Concessions Agenda Highlights

  • US$587mn Antofagasta-Caldera Route 5 – The contract entails the operation and widening of 470km of the country’s main north-south axis, between Antofagasta city and Caldera.
  • US$470mn Valdivia Access Network– The contract entails the operation and improvement of routes 202 (44km) and 206 (43km), which are the main accesses of Valdivia city in Los Ríos region.
  • US$490mn Temuco-Río Bueno Route 5 – The contract covers the operation and improvement of 172km between both cities in Araucanía region and Los Ríos.
  • US$430mn Concepción North Access – The contract includes the operation of a 75km access of the capital of Biobío region, plus 14km of branch roads.
  • US$323mn Pie de Monte Route – The contract includes the construction and operation of an alternative road to the current Ruta 160, in the section between the municipalities of San Pedro de la Paz and Coronel in the South of Chile.
  • US$376mn Iquique-Antofagasta Route 5 – The contract includes expanding the Route 5 highway between the cities of Antofagasta and Iquique into a four-lane highway. A project that is highly needed given the number of trucks currently using the highway.
  • US$398mn Airport Light Rail – The project includes the construction of a 12km light rail to connect the international airport with Santiago. The initiative will connect the Santiago subway system with the airport.
  • US$313mn La Serena-Coquimbo Light Rail – The project involves providing a railway service between the cities of Coquimbo and La Serena, making use of existing infrastructure. Work involves the rehabilitation and upgrade of the existing line. In addition, the train would provide services 24 hours a day and fares would be similar to those charged by existing public transport providers.
  • US$78mn Valparaiso Cable Car – The project calls for building a cable car public transport system with capacity for 3,000 passengers in each direction per hour. It is expected to improve connectivity in Valparaíso with the majority of residents located in the hills above the city.
  • USD$1.2b Interconnection Route 68 / Santiago-Valparaíso-Viña del Mar – The project calls for expanding one of the main routes used to exit Santiago for Vina Del Mar, Work will include adding more lanes, replacement of bridges, and two new tunnels.

New Competition

One of Chile’s goals is to continue attracting foreign investment to its infrastructure sector. For the first 30 years, tenders were dominated by Canadian, Spanish, American and European companies. They profited greatly and praised the Chilean model. This is set to change with new competition from Chinese state companies. They have not only started bidding on projects the last few years but have now started winning. 

Just this month, China Railway Construction Corporation was awarded the second concession of the Chillán-Collipulli stretch with an investment of US$600mn. This is after being awarding the US$851mn Talca-Chillán stretch in 2021 which means the company will now operate a continuous 364km stretch of the country’s main north-south highway.

Some of the most recent wins include – 

  • Route 5. Chillán-Collipulli stretch (US$596mn): Recently awarded.
  • Route 5. Talca-Chillán stretch (US$851mn): Detailed Engineering in progress.
  • Maule hospital network (US$297mn): Preliminary works concluding.
  • Las Palmas reservoir (US$174mn):  In works.
  • Santiago metro line N°7 (US$2.5bn): Recently starting works. 

The execution of these first projects will determine how Chinese investment is viewed in Chile. If Chinese companies can execute the projects to a high level, then there will be more projects to win, and the increased competition will be viewed favorably by Chileans. If there are issues with project execution and/or quality, then there will be a more critical audience of Chinese investment.  


Chile has a healthy infrastructure pipeline that will provide opportunity for foreign investors and companies. Beyond tendering as a concessionaire, there are opportunities for engineering services, construction, services, products, and anything else that would be required for large infrastructure projects.

Although 2022 was a slow a year for new tenders, it may have been a positive development since inflation for materials and labor in 2022 were difficult to manage for the construction industry in general. Projects already awarded face delays due to more stringent environmental approvals, delays with land acquisitions, and in some cases, community opposition.

The concessions model in Chile still needs to adapt to the new times. The original laws were enacted over 30 years ago, and while they helped the country improve greatly, many lessons have been learned over the years. For Chile to continue improving its infrastructure, there is some changes that will need to take place at a policy and regulatory level. For now though, the concession model continues. Fortunately for Chile, there are plenty of companies interested in participating.

Ax Legal is an advisory firm that works with foreign companies in Latin America. Our team of legal and commercial advisors have a distinguished track record of helping foreign technology and services companies to grow and operate in Latin America. Over the years, we have worked with starts up, mid-size businesses, and publicly listed companies. The one common factor that connects our clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

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