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Críticsms From Businesses in El Salvador on the Partnerships Act

Private sector operators see in the Law of Public-Private Partnerships serious deficiencies which would prevent the bill from obtaining the desired results.

Monday, May 27, 2013

"The law, as it has been approved, will not achieve the expected results, we believe that it is not a good law, it has serious deficiencies that will make it very difficult to obtain the expected results," said Javier Castro, director of Department of Legal Studies (DEL) of the Salvadoran Foundation for Economic and Social Development (FUSADES).

"According FUSADES, there are changes that will hinder the approval of new projects. For example, the project submitted by the Executive stated that the Legislative Assembly should endorse partnerships, but the approved law states that the deputies must pass both the tender conditions and contracts", reported Prensalibre.com. "We believe this mechanism (double approval) as stated in the PPP law will be a disincentive to attracting investment," said Castro.

Source: prensalibre.com

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Key entities

Salvadoran Foundation for Economic and Social Development Luis Javier Castro Asamblea Legislativa (El Salvador) Salvadoran Industry Association Jorge Arriaza Mario Magaña Cámara de Comercio e Industria de El Salvador

Countries

El Salvador

Insight

association public-private partnership investment Investment investor Infrastructure business association Law Infrastructure Investment Public investment Government

El Salvador: Criticism of Partnerships Act Reforms

May 2014

In the view of the private sector the weak point of the reform is the excessive state intervention in bidding for public-private projects.

From a statement by the Foundation for Economic and Social Development (FUSADES):

INCOMPLETE REFORMS TO LAW OF PUBLIC PRIVATE PARTNERSHIPS

El Salvador: Business Vision of the Economy

January 2014

The report "Economic Results At Close of 2013 and Prospects for 2014 " indicates that macroeconomic stability is threatened by rising public debt in relation to GDP.

In order to reverse the trend of economic stagnation reflected by the indicators analyzed, the Chamber proposes adopting measures such as the award of Puerto La Union, improving the investment climate, reforming the Law of Public-Private Partnerships (key to securing approval of the disbursement of funds from the second round of FOMILENIO), the adoption of the Law on Legal Stability of Investments and approval of a competitiveness agenda focused on reducing the costs incurred for operating in the country, among other things.

El Salvador: Public Private Partnerships Law Needs Change

August 2013

FUSADES is asking the Salvadoran Congress to make reforms to the Special Act on Public-Private Partnerships in order to ensure its effectiveness.

The Salvadoran Foundation for Economic and Social Development (FUSADES) is refering to the reforms that have been put forward by the ARENA party which among other things suggest that the Agency for Promotion of Exports and Investments of El Salvador (PROESA) be in charge of monitoring the administration of the law. The recently passed legislation "includes a new administrative institution: the Directorate of Public-Private Partnerships", reported Laprensagrafica.com.

Criticism of Public-Private Partnership Projects

February 2012

Representatives of employers in El Salvador say the bill submitted to the Legislature does not provide legal certainty to investors.

The draft Law on Public Private Partnerships (PPP) is unsatisfactory to businesses and analysts, and they fear that if passed in its present form, there would be enormous discretion used when carrying out its regulatory functions which would not ensure legal certainty for investors .