El Salvador: Construction Stagnates

Excessive bureaucracy, which is holding up the execution of new construction projects, generating uncertainty among investors, is added to a delicate fiscal situation.

Thursday, November 10, 2016

Estimates are that 110 construction projects have been left "stagnant" this year  because of the slow pace of analyzing and awarding building permits, leaving $600 million not being executed, according to the president of the Salvadoran Chamber of Construction (Casalco), Angel Diaz.

The legal reform to expedite the process which Casalco proposed in September does not solve all of the problems, because "... it is optional and not mandatory, said Diaz, therefore "public officials prefer not to go through the law' said the president of the Casalco. "

The country's fiscal situation is not helping either. "... 'Any uncertainty creates problems for the behavior of society and businesses work based on risks, and the risks incurred by the government not agreeing with the ARENA party really leads to significant consequences, not only for the construction sector but for all sectors'."

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More on this topic

El Salvador: Building Permits Unblocked

February 2017

The government has granted permits for access to drinking water which were needed by 147 construction projects valued at $1.2 billion, which are expected to be developed over the next three years.

The drinking water feasibility studies which have been finally delivered make up some of the paperwork which has held up for several months, leading to complaints from entrepreneurs who put pressure on the government to expedite these formalities.

El Salvador: Speeding up the Building Permits Process

September 2016

The construction union estimates that if approval is given to the reform bill to streamline and simplify procedures, it will take 30 days to obtain a permit.

The Salvadoran Chamber of the Construction Industry (Casalco) proposes amending the Special Law for Streamlining Procedures for Construction Project Development and improving the current timeframes for obtaining building permits and environmental certificates. 

Upcoming Construction in El Salvador

July 2016

Office buildings, shopping malls and apartments make up the list of projects that the construction union envisages undertaking in the second half of the year.

Although there are still delays in granting permits and other arrangements which have to be undertaken before launching construction projects, the union for this sector foresees a second half with better results. This year there are plans to implement projects worth between $500 million and $750 million in private works.

El Salvador: Obstacles for Construction Sector

October 2015

Two years after its approval, the law streamlining procedures for construction does not operate, delaying projects which are in process and preventing the onset of new ones.

Added to this is lack of investment in public infrastructure, which is preventing the private construction sector from developing new projects, particularly in areas where there is not adequate road infrastructure.

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