Fitch: Colombia’s Temporary Freeze on Toll Road Hikes Seen As Credit Neutral

Fitch Ratings believes the Colombian Ministry of Transportation’s (MoT) announcement to freeze above-inflation tariff increases is neutral for the ratings of Fitch-rated toll road projects. Specifically, Patrimonio Autonomo Union del Sur (BB+/Stable and AAA[col]/Stable), which is included among the affected projects. Fitch’s cases do not assume any above-inflation catch-up tariff increases from 2025 onwards.

This announcement is set to address the communities’ backlash from elevated tariff hikes for 2025 in some toll stations. The intention is to freeze these increases for at least six months, during which the MoT and Agencia Nacional de Infraestructura are expected to negotiate the timing and compensation mechanisms, with eligible projects under their concession agreements. Fitch will monitor further announcements from the MoT.

Additionally, on Dec. 31, 2024, the MoT announced a phased implementation of the pending 2023 inflation adjustment (4.64%) on tariffs, applying 60% from Jan. 1, 2025, and the remainder on April 1, 2025. The 2024 inflation increase, projected by Fitch at 5.3%, will take effect on Jan. 16, 2025, following official data released by the Departamento Administrativo Nacional de Estadística. Despite delays in implementing inflation-based tariff adjustments, Fitch assesses the impact on rated projects as neutral.

Headline photo: Tunel de Oriente (credit: Loren Moss)