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.
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.
Obtaining a building permit can require filling out 21 pieces of paperwork in eight different entities, which can take up to 276 business days before a response is received.
The government has announced that work will begin in September with the development of infrastructure projects in the coastal zone.
According to the government, the decision was made to start in September in conjunction with representatives of the Millennium Challenge Corporation in Washington, USA. Roberto Lorenzana, technical secretary of the presidency, said: "... the preparation phase of the roads that is part of the agreement has now been finished, and the census of the people who will be relocated by development of these works."
Lack of official results from the March 1st elections creates uncertainty among employers and undermines the country's image as a destination for foreign investment.
Representatives from the Salvadoran Association of Industries (ASI) argue that "... the political environment in the country could deter foreign investors. " In addition, this could affect the disbursement of Fomilenio II.
The government plans to make a second call so that investors can submit eligible projects to the investment program 'Apuesta por InversionES', a nonreimbursable fund created as part of Fomilenio II.
With the recent approval of Fomilenio II, the government of El Salvador is considering extending the call for investment projects eligible for funding from the program 'Apuesta por Inversiones ' (API), for which there are 13 projects that passed the eligibility phase in the first call, "... and which represents $14 million in private investment and $48 million in public investment. Of these, six are related to the tourism area, three in agribusiness, two energy, one aquatic and one for aircraft. "
The United States will spend $277 million on investment in public infrastructure, with an additional contribution from the Salvadoran government of $88 million.
From a statement issued by The Millenium Challenge Corporation (MCC):
Washington, D.C.—The Millennium Challenge Corporation signed a $277 million compact with the Government of El Salvador, the second-largest investment in Central America by the U.S.
The United States Embassy in El Salvador has announced the approval of a second phase of the Millennium Challenge, through an investment of $277 million.
From a statement by the US Embassy in El Salvador:
MCC Will Sign Second Compact with El Salvador
The U.S. Embassy is pleased to announce that the Millenium Challenge Corporation (MCC) will proceed to signing a second Millennium Challenge Compact with El Salvador.
The U.S. is awaiting reforms promised in the Laws of Partnerships and Private Money Laundering, before releasing $277 million in aid to El Salvador.
An article on Nacion.com reports that "... In a meeting with journalists, representatives of the Millennium Challenge Corporation (MCC) and the Embassy of the United States spoke about FOMILENIO II. At the conference, U.S. officials insisted they are waiting for the approval of legislative reforms that will lead to the signing of the second agreement, which would benefit the coastal area of El Salvador. "
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.
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