Spain govt eyeing options for indebted toll roads

* Spain govt seeks solutions for toll roads

* Mulls mechanism to offset falling revenues

MADRID, Oct 28 (Reuters) - Spain is studying ways to help indebted toll roads resolve their problems after a newspaper report said it wanted to promote sector mergers to avoid a 3 billion euro ($4.16 billion) bailout.

The Public Works Ministry said it had made a “preliminary analysis” of the options, but no decision had been made yet.

Newspaper Expansion said on Thursday the government wanted to merge stable toll roads owned by Abertis ABE.MC and Cintra FER.MC with less mature struggling roads in Madrid and Levante, eastern Spain.

“We are aware of the importance of the road sector for our economy and the problems some concessions are facing due to the sharp drop in traffic from the crisis,” the ministry said.

As a temporary solution the government is considering implementing a support mechanism to cover potential declining toll revenues after a five-year period, Expansion said. (Reporting by Tracy Rucinski; Editing by Will Waterman) ($1=.7205 Euro)