A proposal has been made to reduce the number of times a public-private partnership project would pass through the filter of the Legislative Assembly.
Among the reforms to the Law on Public-Private Partnerships that the Council for Growth has suggested to Congress is a reduction, from three to one, of the number of times a Public- Private Partnership (PPP) project should go through the filter of parliamentary approval.
If approval is not given to the amendments to the Law on Public-Private Partnerships and the Money and Asset Laundering Act, the second disbursement will not be realised.
This was explained by Salvadoran President Mauricio Funes. "Donors are free to stipulate any conditions deemed appropriate. Everything that is the responsibility of the Executive has already been done," he said.
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.
Businessmen want to expedite the process of approval by the Legislature, in which Proesa is the governing body, and which may include water and sanitation projects.
Members of the Council for Growth are seeking Congressional support in order to make three amendments to the Special Act on Public-Private Partnerships.
Private sector operators see in the Law of Public-Private Partnerships serious deficiencies which would prevent the bill from obtaining the desired results.
"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).
The project aims to facilitate the arrival of foreign investment in the country, but it remains trapped in Congress.
"The law presented by the government is positive. Hopefully this is a good law, but in itself it is not enough. If conditions (such as uncertainty, bureaucracy, etc..) carry on being reinforced, then the law will not help "said Roberto Rubio, from Funde.
An IDB study indicates that delays in the approval of the law on public-private partnerships is jeopardizing private investment.
According to a study by the Economist Intelligence Unit, a project funded by the Inter-American Development Bank (IDB), while El Salvador has made progress in preparations for Public-Private Partnerships (PPPs), delays in the approval of a regulatory framework are jeopardizing private investment.
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 .
Adjustments to the text are being planned in anticipation of the implementation of Public-Private Associations (APP in Spanish).
This will be the second amendment to the Competition Act since it was created.
The main reason for this reform is to adapt standards to the government’s economic recovery plans and the imminent operation of the Public-Private Associations (APP).
The Salvadoran Presidential Secretariat has presented a draft Law on Public-Private Partnerships to the Legislative Assembly.
A press release from the President of El Salvador states that:
“The Technical Secretariat of the Presidency presented this week a draft Law on Public-Private Partnerships (PPPs) as a tool to enhance public and private investment, generating growth and economic development in El Salvador.
Experts from various countries have been discussing the how to make the law successful in terms of attracting foreign investment.
Flexiblity, clarity and the inclusion of detailed processes are the characteristics that should define the new public-private partnership law whose draft version is currently being re-discussed in the country.
The law would regulate state participation in these associations, to establish parameters for private enterprises and the regulations regarding tendering and contracting procedures.
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