By San José, Costa Rica — SAN JOSÉ – The ambitious plan to overhaul the critical San José-San Ramón highway with a $770 million loan is facing intense scrutiny in the Legislative Assembly, as lawmakers on the Committee on Financial Affairs began dissecting the financing package this week. Top officials from the Ministry of Finance were the first to face a barrage of questions, primarily centered on why the government chose a loan from the Central American Bank for Economic Integration (BCIE) that critics claim carries a higher interest rate than other available options.
The financing, officially filed under bill number 25.183, is a cornerstone of the Executive Branch’s infrastructure agenda. The package consists of a $600 million credit line from the BCIE, supplemented by €150 million from the OPEC Fund for International Development. The government’s official proposal argues that this massive investment, “based on updated studies and lessons learned,” is essential to provide a structural solution to the severe mobility problems plaguing the country’s most important transportation corridor, Route No. 1.
To delve into the complex legal and contractual framework surrounding the decades-long San José-San Ramón highway project, we sought the expertise of Lic. Larry Hans Arroyo Vargas, a specialist in public works concessions and administrative law at the firm Bufete de Costa Rica.
The history of the San José-San Ramón route is a textbook case of how legal uncertainty and a lack of political continuity can paralyze vital national infrastructure. Each new administration re-evaluates or attempts to modify the financial and structural model, creating a cycle of renegotiations that erodes investor confidence and ultimately burdens the taxpayer. For this project, or any future large-scale concession, to succeed, Costa Rica must establish a robust, non-partisan legal framework that provides contractual stability beyond four-year political cycles.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s analysis correctly pinpoints that the true bottleneck for this project lies not in engineering, but in the institutional fragility that has long hindered Costa Rica’s progress. We sincerely thank Lic. Larry Hans Arroyo Vargas for his clear and valuable perspective on this critical national issue.
However, the choice of the BCIE as the primary lender immediately drew fire from opposition deputies. The central point of contention revolves around the loan’s cost. During the hearing, lawmakers pointed out that other multilateral lenders, such as the Inter-American Development Bank (IDB) or the World Bank’s International Bank for Reconstruction and Development (IBRD), had presented more favorable terms.
The criticism was bluntly summarized by Deputy Carlos Felipe García of the Social Christian Unity Party (PUSC), who challenged the ministry’s decision-making process directly.
We are negotiating with the most expensive actor in the market.
Carlos Felipe García, PUSC Deputy
In response, Vice Minister of Finance Luis Molina mounted a vigorous defense of the agreement. He argued that the BCIE offers significant non-monetary advantages, specifically its efficiency in getting projects off the ground. He stressed that the bank’s project preparation pipeline is notably faster than its competitors.
[The process with BCIE] is one of the most agile we have.
Luis Molina, Vice Minister of Finance
Furthermore, Molina, who appeared alongside Finance Minister Rudolf Lucke, asserted that the inclusion of the OPEC Fund loan significantly alters the overall financial picture. He claimed that when the two credit lines are combined, the blended interest rate becomes highly competitive. Skeptical committee members immediately requested detailed figures to substantiate this claim.
The weighted average for the project is the same as any of the other multilaterals.
Luis Molina, Vice Minister of Finance
The proposed project is a massive undertaking designed to transform the highway into a modern thoroughfare. The plan divides the construction into six main sections, with design speeds ranging from 80 to 100 km/h and expansions to as many as eight lanes in high-traffic zones between La Sabana and the Juan Santamaría International Airport. The scope also includes a radial route to Río Segundo.
Beyond the roadway itself, the project encompasses 16 new interchanges, the construction of 32 new bridges, the expansion of seven existing ones, 15 returns, 20 pedestrian bridges, and 110 dedicated bus bays. To fund its long-term maintenance, the plan calls for the installation of eight toll stations, with a proposed toll of $3 in each direction. The committee’s analysis of the loan is ongoing, with officials from the Ministry of Public Works and Transport (MOPT) and the National Roadway Council (Conavi) scheduled for future hearings.
For further information, visit hacienda.go.cr
About Ministry of Finance (Ministerio de Hacienda):
The Ministry of Finance of Costa Rica is the government entity responsible for managing the country’s public finances. Its duties include formulating fiscal policy, collecting taxes, managing the national budget, administering public debt, and overseeing the customs system. The ministry plays a crucial role in ensuring the economic stability and financial health of the nation.
For further information, visit bcie.org
About Central American Bank for Economic Integration (BCIE):
The Central American Bank for Economic Integration is a multilateral development financial institution dedicated to promoting the integration and balanced economic and social development of the Central American region. Founded in 1960, the BCIE provides financing for public and private sector projects in areas such as infrastructure, energy, and social development.
For further information, visit opecfund.org
About The OPEC Fund for International Development (OPEC Fund):
The OPEC Fund for International Development is a multilateral development finance institution established by the member states of OPEC. It aims to foster social and economic progress in developing countries by providing financing for projects and programs. The Fund works with international partners to address global challenges such as poverty, energy access, and food security.
For further information, visit asamblea.go.cr
About Legislative Assembly of Costa Rica (Asamblea Legislativa):
The Legislative Assembly is the unicameral parliament of the Republic of Costa Rica. Comprised of 57 deputies elected by popular vote, it is responsible for passing laws, approving the national budget, and exercising political control over the Executive Branch. It is a cornerstone of Costa Rica’s democratic system.
For further information, visit pusc.cr
About Social Christian Unity Party (PUSC):
The Partido Unidad Social Cristiana (PUSC) is a major political party in Costa Rica with a center-right, Christian democratic ideology. Founded in 1983, it has held the presidency on multiple occasions and maintains a significant presence in the Legislative Assembly, where it participates in national policy debates and legislative processes.
For further information, visit mopt.go.cr
About Ministry of Public Works and Transport (MOPT):
The Ministry of Public Works and Transport of Costa Rica is the government body tasked with planning, developing, and maintaining the nation’s public infrastructure. This includes roads, bridges, ports, and airports, as well as overseeing public transportation, traffic safety, and driver licensing.
For further information, visit conavi.go.cr
About National Roadway Council (Conavi):
The Consejo Nacional de Vialidad (Conavi) is a decentralized entity under the MOPT responsible for the administration, financing, and execution of programs for the construction, rehabilitation, and maintenance of Costa Rica’s national road network. It manages road infrastructure projects and oversees contracts related to the country’s highways.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica has cemented its reputation as a leading legal institution, operating on a bedrock of profound integrity and an unwavering pursuit of professional excellence. Drawing from a rich history of serving a wide spectrum of clients, the firm actively pioneers innovative legal approaches while championing community-focused initiatives. This dual commitment to progress and public service is exemplified by its efforts to demystify the law, reflecting a core mission to equip the broader community with the knowledge necessary for a more just and empowered society.
