The government has granted access permits for potable water that were pending for 102 construction projects valued at $300 million.
Representatives from the Executive Power and the National Association of Aqueducts and Sewers (ANDA), delivered the package of permits to the Salvadoran Chamber of the Construction Industry (Casalco), "... which will translate into 3,300 new potable water services."
Its been reported that the time it now takes to obtain a construction permit to develop a large project is 125 days, compared to the 279 days it took previously.
The Regulatory Improvement Organization (OMR) reports that in the case of less complex construction projects, the timeframe for completing the process has been reduced from 125 to 50 business days.
If the projections of the union are accurate, between public and private investment, $900 million will be earmarked for new construction projects this year.
Although official figures have not yet been revealed, the Salvadoran Construction Chamber (Casalco) estimates that in 2016 the sector's growth was 2.5%, and realistically this year they predict an overall increase of just 1% more than last year.
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.
The construction union estimated that $500 million worth of projects are on hold because they have not yet received the water feasibility permits they need.
Although months ago the Salvadoran Chamber of the Construction Industry (Casalco) estimated the value of construction projects halted due to lack of various permits at $700 million, union representatives claim that"... a part of that, which is worth $200 million- they have now started to resolve".
Fourteen projects, valued at $188 million, will start running as soon as they have obtained the permits which had previously been held up due to bureaucratic obstacles.
Elmundo.sv reports that "... The projects will start to be executed after the National Administration of Aqueducts and Sewers (ANDA) and the Ministry of Environment and Natural Resources (MARN) expedite the granting of permits, said the Government, as a result of joint work with private enterprise. "
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.
In the first two months of the year the total amount of loans granted to build houses fell by 85% compared to the same period in 2015.
Data from the Salvadoran Chamber of Construction (Casalco) indicates that out of the total credit extended by the banking system to productive sectors in the country, only 1% was for construction loans.
As for loans granted for housing, in January and February Casalco reported that only $1.2 million was awarded to construction companies, well below the $8 million recorded in the same period in 2015.
The government has yet to make operational the law streamlining procedures for construction approved in late 2013, delaying the start of projects totaling more than $700 million.
Although it seems hard to believe, a law which was approved more than a year ago can not be implemented due to the lack of "real will to make the necessary changes." Meanwhile, construction projects estimated at about $700 million can not advance, having been drowned in excessive state bureaucracy.
The ineffectiveness of the law streamlining procedures for construction, approved in late 2013, is delaying investment of at least $700 million in projects planned for this year.
Bureaucratic obstacles to construction continue and as long as the law streamlining procedures for construction is not operational, around $1,6 billion will remain paralyzed, this being the amount estimated that the private sector would have invested in real estate development projects in the next five years.
In El Salvador entrepreneurs from the construction sector say the country loses $500 million in new investment projects because of the slow process of obtaining permits.
The Salvadoran Chamber of Construction Industry (Casalco) is once again asking the government for clear rules and efficient processes in the granting of permits for new construction projects.
The industry claims that the law streamlining procedures is not being implemented in all institutions involved in the permitting process.
The law which aims to reduce the time it takes to gain authorization for medium and long term real estate projects from 880 days to 175 days, is not being applied equally by state entities.
Carlos Guerrero, president of the Salvadoran Chamber of Construction (Casalco) said in an article on Laprensagrafica.com ".... 'Importance has not been given to this law. There are many (government) institutions that are not complying with it.'"
Lack of private sector confidence in the government and excessive bureaucracy prevented greater investments being made in this industry during 2013.
The construction industry describes 2013 as a year of stagnation, it is estimated that the Gross Domestic Product (GDP) of the sector will be 0% even though the previous year it closed at -2.4%. "We are closing the year without any growth," said Carlos Guerrero, president of the Salvadoran Chamber of the Construction Industry (Casalco).
The rule is effective immediately for municipalities included in Fomilenio II and for housing projects.
"... After six months of its entry into force it can be used by project developers of any kind nationwide, explained Ismael Nolasco, executive director of CASALCO. "
Carlos Guerrero, president of the Salvadoran Chamber of the Construction Industry (CASALCO) said the Special Act for Streamlining Paperwork for Building Construction Projects will help boost the economy and create more jobs.
It is expected that its entry into force will accelerate the procedures for granting permits for construction projects.
From a press release issued by the Legislative Assembly of El Salvador:
During the plenary session, the deputies approved with 70 votes, the Expediting Act on Procedures for Construction Project Development, which aims to promote economic and social development, by streamlining processes and procedures relating to the granting of administrative permits and approvals for the development of construction projects and its subdivisions.