Reforms Sought in Salvadoran Purchase Laws

Both construction entrepreneurs and the Minister of Public Works say that there are no flexible mechanisms provided to resolve conflicts.

Monday, March 23, 2009

The difficulties incurred in complying with the Law of Contracts and Procurement of Public Administration (LACAP), would result in multimillion dollar losses due to crippled projects, contracts not awarded and lengthy litigation, with the consequent loss of jobs and necessary dynamism in the construction sector.

In particular, the law is accused of not facilitating price adjustment in contracts signed by the State, and in not including an arbitration clause in these contracts; differences can only be resolved by resorting to common law which is procedurally slow and cumbersome.

More on this topic

El Salvador Could Reform Public Acquisitions Law

June 2010

A bill will be introduced this week to simplify and speed up government acquisitions, and to include more small and medium companies in the process.

These changes are being proposed by the Salvadoran Construction Chamber (Casalco).

According to Elsalvador.com, “the Chamber wants to adjust the money volumes required for contracts shorter than 12 months, and to make it easier to obtain warranties for each acquisition”.

El Salvador: Housing Construction Down 50% in 2009

December 2009

The Chamber of Construction pointed to lack of credit as the main culprit.

Ismael Nolasco, director of the Chamber, stated that 2009 has been one of the worst years for the housing sector, with a loss of 10.000 direct jobs.

"On average, financial institutions granted 67% less loans for buying homes than in 2008", reported Elsalvador.com.

El Salvador Awards Less Public Works

April 2009

In the first quarter of 2009, contract awards for public works declined by 25% when compared to the same period in 2008.

According to the Salvadoran Construction Industry Chamber (CASALCO) in an article published in Elsalvador.com, of the total investment planned for the first quarter of the year, only 37% of the projects were awarded, a figure lower than last year when 63% of the work was awarded for the first three months of the year.

Lack of Regulatory Laws in El Salvador

November 2012

Businessmen from various sectors are demanding regulation by the government of several existing laws, which allow for different interpretations and legal uncertainty.

Elmundo.com.sv reports that "representatives of the Salvadoran Association of Industrialists (ASI), the Salvadoran Chamber of Construction (Casalco) and the Corporation of Exporters of El Salvador (Coexport), said that the lack of regulations or breach of these in many laws intended to raise productivity, is generate the opposite effect from the original objective. "

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