The headline on a recent story in local daily La Nación says it all: “Horror Story.” A highway connecting San José with the Pacific port town of Caldera in the shortest route possible started as a dream in 1973. Ever since then, it’s been a nightmare of legal battles, bureaucracy, waste, and political foot-dragging – until now. With a concession from the Ministry of Public Works and Transportation in hand, contractor Autopistas del Sol broke ground on the new highway last year. If all goes according to schedule (which it has, up through the start of 2009) the highway should be done by the middle of 2010.

The highway’s effect on the real estate market will be significant. Currently, the easiest way to get to the Central Pacific (Jacó, Hermosa, Esterrillos, Quepos, Manuel Antonio) from San José by car is a looping, dangerous, 2-lane road that appears to take you right over the mountains. The journey to Puntarenas and Jacó lasts 2-2.5 hours, and that’s when the traffic is light.

The new highway – which will be a toll road – will shave 45 minutes to an hour off the drive, in addition to making it more pleasant and much safer. What’s more, rather than connecting to the Central Valley via the Inter-American Highway that goes past the airport, the Caldera-San José highway will plug in to the Próspero Fernándezhighway that passes by La Sabana, Escazú, Santa Ana, and Ciudad Colón - the heart of the expatriate colony.

Further down the line, the highway will open up new areas of development as it passes properties and communities that have yet to be touched by the real estate boom. Places like Guácimo and Turrúcares, currently sleepy little backwaters, will now have the country’s most modern highway running right past. With their great weather and friendly atmospheres, plus the beach and services access afforded by the new highway, these little communities could turn into the new hot spots for development.

In addition to opening up new frontiers, the highway will improve some of the old ones. The Próspero Fernández Highway that connects Ciudad Colón, Santa Ana, and Escazú will now have six lanes, longer merge lanes, and better overpasses, all factors that should greatly reduce the horrendous traffic jams that area of the country currently experiences.

At the Pacific end of the line, the existing highway will be resurfaced and expanded as well, and the small town of Orotina will find itself at a crossroads that connects it to Guanacaste, the Southern Zone, San José, and the Central Pacific. It’s another market worth keeping an eye on.

What’s the total cost? Autopistas del Sol puts the bill at $366.9 million, which they’ll pay by collecting tolls for the next few decades. The cost to drive the whole highway will be $3.50, and the toll gets prorated depending on how far you drive.

Finally, the San José-Caldera Highway should be taken as a cautionary tale. The project is typical of the slowness with which the Costa Rican government approaches public works projects. Highways, airports, bridges, roads, water projects – they all take years longer than they’re supposed to.

As you approach buying property in Costa Rica, you will hear any number of rumors about new airports in the works, or roads that are just about to be paved, or a new aqueduct that the government is building. It might very well be true that the government is planning these things, but as with the San José-Caldera Highway, it could take 30 years to actually get built.

Bottom line: Never make a real estate purchase in Costa Rica based on promises of new infrastructure.