The Cost of Political Instability

More than two years ago, Convía won the contest to rehabilitate and operate the Escuintla-Puerto Quetzal highway in Guatemala. However, the Congress of the Republic, which is in chaos due to a new political crisis, has not yet defined whether to approve the PPP or not.

Thursday, November 26, 2020

After a bidding process, the concession was granted in July 2018 through a public bidding process to the Consorcio Autopistas de Guatemala (Convía), a business group that passed the proposals of Mota-Engil Latin America and Anas International Enterprise.

Although Convía won the tender, in November 2019 Congress voted against the bill that under the format of Public Private Partnership (PPP) gave the company the use of the road section.

See "Politics Vs. Development"

The PPP, which had completed all its administrative stages, was practically lost. However, after a protection action was filed with the Constitutional Court (CC), in July 2020 the highest body ordered Congress to hear the case again in a third debate, since, according to the CC, legal principles and legality were violated when the project was discarded.

The ruling was clear, but so far Congress has not voted on it. Sandro Testelli, president of Marhnos Guatemala, explained to Prensalibre.com that "... we see that there are good attitudes of some legislators and others that maintain the doubts and what we are trying to do is to clarify these doubts about how a PPP works and that everyone has the same information and with that data they decide from their own point of view which is the best premise."

Also see "Negative Message to Investors"

Although the country has serious deficiencies in its road infrastructure, the executive says that if it does not receive congressional approval, the project could be lost.
Testelli said that "... the risk that has been observed is not having the highway and paying the compensation, which is the worst case scenario, although it is a decision for the legislative body. It is believed that the project is a good sign under the PPP scheme for foreign investors, 'since Guatemala needs 20 thousand kilometers of infrastructure and not 40'."

Congress should be aware of this file, but currently the Legislative body is in chaos, because the approval of the General Budget of the Nation 2021 caused a new political crisis in the country.

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More on this topic

Controversy Grows Over Highway Concession

November 2019

After the Guatemalan Congress voted against the bill granting the concession to rehabilitate and operate the Escuintla-Puerto Quetzal highway, the winning company asks to return the process to third reading, but some deputies refuse.

Although the concession was granted in July 2018 through a public tender process to the Consorcio Autopistas de Guatemala, a business group that overcame the proposals of Mota-Engil Latin America and Anas International Enterprise, Congress voted against the bill that ceded in favor of the company the use of the road section.

Politics vs. Development

October 2019

The Guatemalan Congress voted against the bill that granted a private company the concession to rehabilitate and operate the Escuintla-Puerto Quetzal Highway, which will require the presentation of a new bill to revive the road project.

Since the beginning of 2019, the spotlights were placed on this project, since in April members of the National Council of Alliances for the Development of Economic Infrastructure (Conadie) visited the Congress of the Republic, with the objective of knowing the progress of the initiative of the public-private alliance project, which at that time was in the hands of the Commission of Communications, Transport and Public Works.

Approval for Highway Concession

August 2019

After months without progress being reported in the process, the Communications Commission of the Guatemalan Congress issued a favorable opinion to the bill to rehabilitate and operate the Escuintla-Puerto Quetzal Highway.

The procedure has been delayed by several months, as the dossier was submitted from 5 October 2018 and only on 6 August received a positive opinion from the Committee on Communications, Transport and Public Works.

Bureaucracy Threatens Highway Concession

March 2019

Because of the lack of progress in Congress and the fact that 2019 is an election year, there is a risk in Guatemala that the concession to rehabilitate and operate the Escuintla-Puerto Quetzal Highway will not be granted.

In July 2018, the Consorcio Autopistas de Guatemala was awarded the contract for the rehabilitation, maintenance and administration of the Escuintla-Puerto Quetzal highway, with toll collection.

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