The Special Commission on Infrastructure of the Costa Rican Assembly endorsed the bill that seeks to regulate the schemes for the development of public-private partnership projects.
The initiative, which has yet to go beyond the debate in the Legislative Plenary, establishes the processes and modalities for promoting private investment for the development of public infrastructure, public services and services related to these, applied research projects and/or technological innovation.
The international tender for lighting and video surveillance of 143 kilometers of road sections in El Salvador began, a contract that will be executed through a Public-Private Partnership.
Companies interested in applying for the project will have four months to submit their technical and financial proposal. After an evaluation process, the contract of the winning company must be approved by the Legislative Assembly.
The Central American Bank for Economic Integration approved a loan to the government of Costa Rica to finance part of the project "Fast Passengers Train of the Great Metropolitan Area."
The investment in infrastructure and equipment of the project represents $1.298 million, which is expected to be executed under the modality of Public Private Partnership, with a state contribution of $550 million, which will be provided by the Central American Bank for Economic Integration (CABEI), according to a statement from the financial institution.
In El Salvador, the contract for the financing, design, construction and operation of the San Oscar Arnulfo Romero y Galdámez International Airport Cargo Terminal is tendered under the Public-Private Partnership format.
The project contemplates two phases of development: Phase 1 consists of financing, design, expansion, construction, equipment, improvement of maintenance and operation of the existing Cargo Terminal.
Guatemala, El Salvador and Costa Rica are the countries in the region with the best conditions to develop Public-Private Partnerships, followed by Honduras, Nicaragua and Panama.
The 2019 Infrascope index, which evaluates 23 indicators and 78 qualitative and quantitative sub-indicators in Public-Private Partnerships (PPP) in Latin America, is prepared by The Economist Intelligence Unit and has the financial backing of the Inter-American Development Bank (IDB).
When public resources are very limited, as it happens in Central American countries, association schemes between the State and the private sector become essential for developing the infrastructure that the region so badly needs.
A report from the Secretariat of Economic Integration (Sieca) states that "...In Central America, growing fiscal constraints faced by the countriespublic sectors make it increasingly difficult to achieve efforts for long-term infrastructure projects.In this context, Public-Private Partnerships (PPP) become relevant as an alternative measure of financing where private participation sector is facilitated in partnership with the government, with the aim of improving quality of services, reducing operating costs and capital, generating additional income, improving public management and minimizing budget spending.
The new regulations govern how the private sector can participate in the construction of public infrastructure in the country.
From a statement issued by the Panamanian Chamber of Construction:
For the first time Costa Rica has a regulation on the public-private partnerships scheme, which aims to strengthen partnerships between these two sectors, to promote public works and services, having direct impact on economic recovery, job creation and also to create conditions to continue deal with the back log in infrastructure.
Deficiencies in the regulatory framework, lack of political will and public capacity to plan and monitor partnerships are the reasons why this model of financing has not been used more fully in the country.
A report called Infrascope, prepared by The Economist Intelligence Unit and FOMIN at the World Bank outlines the reasons why the legal concept of partnerships between state agencies and private businesses is not thriving in Costa Rica.
Excessive government guarantees and errors in the tender processes are two of the "Seven Deadly Sins of Deficient Public-Private Partnerships" says the World Bank.
A report from the institution highlights the main mistakes made in the process of building partnerships between governments and private companies for financing and developing productive infrastructure.
In Costa Rica approval has been given to a trust fund through which private companies will be paid $2,700 for each employee hired from the vulnerable population.
The government initiative that aims to pay companies around $2,700 per employee hired from the vulnerable population, has won its first endorsement to be included in a trust administered by Banco Popular.
The government of Costa Rica will pay $2,700 per person to enterprises hiring in vulnerable sectors and whose staff remain in their posts for at least 12 months.
From a statement issued by the Presidency of Costa Rica:
Promoting job creation in two ways: an economic benefit to businesses that hire people and training in dual education.
· Registration of companies and individuals at the website www.miprimerempleo.cr
A publication by the CAF reviews the development of five projects implemented using the public-private partnership model for infrastructure investment in Latin America.
From the Presentation document by the Development Bank of Latin America (CAF):
In recent decades, many Latin American countries have launched public-private partnership projects for the construction, maintenance and operation of public infrastructure.
The government of Costa Rica and the main business union have agreed to create a formal setting to discuss topics related to Competitiveness, Innovation and Talent.
From a statement issued by the Union of Chambers and Associations of Private Business Sector (UCCAEP):
The president, Luis Guillermo Solis has signed a decree officially forming the President's Council on Competitiveness, Innovation and Talent.
The Costa Rican government currently lacks the ability to solve, by itself, the problem of public infrastructure that has been neglected for many years.
An opinion piece by Carlos Camacho, published in Elfinancierocr.com highlights the delay in addressing problems in Costa Rica public infrastructure, a problem that directly affects the country's competitiveness, and gives the example that in the Competitiveness Report by the World Economic Forum 2012-2013, Costa Rica in infrastructure "received a score of 3.8 out of 7, and on the same subject in the overall ranking was ranked 74 out of 144, however, in the category of ‘Road Quality', Costa Rica was ranked 131 out of 144, and in 'Port Infrastructure ', 140 out of 144. Infrastructure is the second most problematic factor for doing business in the country, just ahead of the problem of state bureaucracy. "
In Costa Rica there is no good track record in this matter, but with reviewed rules and better preliminary studies, they still may be the solution to the country's infrastructure problems.
The latest episode was the crater which suddenly opened up on the country’s main highway. Almost every day there is a news story about the poor state of infrastructure in Costa Rica.