Public-Private Partnerships Not Being Leveraged

In the four years that the law of associations between the State and private companies in El Salvador has been in effect, not a single infrastructure project has been able to materialize using this business scheme.

Wednesday, December 13, 2017

Although there are at least seven infrastructure projects that were initially proposed as being those with the highest priority and ideals to be developed under the public-private partnership scheme and with funding from Fomilenio II, none of them has managed to materialize. 

The benefits generated for economies with fiscal problems, such as El Salvador's and in general Central American economies, from the development of productive infrastructure through partnership schemes with the private sector are plentiful. The problem that occurs, as almost always with everything in the region, centers around the bureaucracy and lack of management capacity of those who lead state institutions. 

See also: "The potential of public-private partnerships" reports that "...To date, the projects that the Export and Investment Promotion Agency of El Salvador (Proesa) is evaluating to develop using the PPP model include the Ilopango Airport, a cargo terminal at the El Salvador International Airport, a technology park in Zacatecoluca, the border crossing at La Hachadura, a wind farm in Metapán and the lighting, video surveillance and photo-fines on strategic road sections."

But according to Eduardo Escobal, international consultant for PPP structuring and investment projects, "... a strategy of attracting investments through PPPs involves structuring attractive projects and at the same time offering the best conditions for investors. 'It's not just projects that have to be attractive. A country has to have credibility, it has to be predictable. We also need a legal framework and an independent judiciary, and a mitigated social risk issue,' said Escobal, who has led and participated in the structuring of more than 50 PPPs in the Latin American region."

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