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.
Excessive bureaucracy, which is holding up the execution of new construction projects, generating uncertainty among investors, is added to a delicate fiscal situation.
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 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.
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.
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.
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.
With a new system, the authorities promise to reduce the time for granting environmental permits from 70 to 49 days for high-impact projects, and 20-16 for mild impact ones.
According to a statement issued by the Salvadoran authorities, the new System of Environmental Impact Assessment (SEIA) "... will speed up and reduce waiting times for the issuance of Environmental Permits by up to 30%.
Developers claim that the law streamlining procedures adopted in 2013 is not being enforced by state institutions, which continue to impede investment in the sector.
According to representatives of the builder's guild, there are some private and public projects, all medium-term in the area of homes and businesses, which could not be executed because of the amount of bureaucratic processes that are still pending.
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.'"
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.
An act to streamline procedures intends to reduce the bureaucratic time delay to 120 days, so that construction companies can dynamize the economy with new buildings.
Currently the number formalities required for a construction project is 18.
Elmundo.com.sv reports that "Carlos Guerrero, president of the Salvadoran Chamber of the Construction Industry (Casalco), who also served as environment minister between 2004 and 2009, indicated that this delay makes the country less competitive and will increase costs unnecessarily. "