Bumps ahead for a toll-road push

But now, just 14 years after opening, the Autopista del Sol, or Sun Highway, is a 163-mile mess. Motorists complain of blown tires and ruined suspensions. A national newspaper last year called the thoroughfare, on which a round trip costs $70, "a calvary of cracks, potholes and risks."

The government has been forced to spend more than $60 million to shore up the crumbling motorway linking Morelos and Guerrero states after its operator walked away. Overall, Mexico assumed $14 billion of debt after bailing out nearly two dozen other such projects in the 1990s.

So it may come as a bit of a surprise that President Felipe Calderon is touting toll roads as a solution to Mexico's infrastructure woes. His administration is moving aggressively to award contracts to private companies to finance, build and maintain highways and charge motorists to use them.

It's a strategy being embraced by cash-strapped governments worldwide. France, Italy and Spain have privatized former state-owned toll road companies. New urban expressways in Australia are operated by private companies under long-term concessions from the government. India is looking to upgrade more than 6,000 miles of existing roads with similar toll-road contracts. Public-private partnerships are helping fuel China's infrastructure boom.

But it's highly controversial in Mexico, where the Autopista del Sol remains a potholed reminder of the potential hazards of privatization.

"Mexico is the poster child for how to do [highway privatization] wrong," said Robert Poole, a transportation expert at the Los Angeles-based Reason Foundation, a libertarian think tank. "Now they have a chance to redeem themselves."

Proponents cite a variety of advantages to involving the private sector. Structured correctly, long-term concessions can shift most of the risks of cost-overruns and faulty construction to private operators. For-profit companies have pioneered innovations such as electronic billing and congestion pricing.

But mostly, Mexico's motivation boils down to a lack of money in government coffers.

Mexican officials have budgeted a record $2.7 billion for highways this year. But experts say that is only about half of what the nation should be spending annually to upgrade and expand its 213,000-mile system.