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.
In Guatemala a proposal has been made for private companies to build toll roads, where, in some cases the State pays for the tolls, instead of charging road users.
The proposal of this investment model was raised in the context of the National Entrepreneurs Encounter (Enade), focused this year on the theme of infrastructure.
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.
An announcement has been made in Guatemala that work is being done on a draft specification for the six companies already pre-qualified to participate in the tender, which is now scheduled for the first quarter of this year.
The National Agency for Development Economic Infrastructure (ANADIE) has resumed the process of hiring a company for the construction, maintenance and operation of the State Administrative Center (CAE), after having announced its postponement in December 2015. In order to clear up any doubts and clarify aspects of the project, the company met with representatives of the six companies that have been prequalified. The project has an estimated cost of $180 million.
In Guatemala it has been proposed that private companies invest in the construction of local public works an amount equivalent to what they should pay in taxes.
The proposal put foward by the Foundation for the Development of Guatemala (Fundesa), to be officially presented in October draws on ideas in Law No. 29230 of Peru, where "... Since its implementation at least 33 projects have been completed .
The current political turmoil is threatening the implementation of important infrastructure projects such as the construction of the State Administrative Center, valued at $200 million.
The resignation of several ministers in Perez Molina's cabinet, including Sergio de la Torre, Economy Minister and Commissioner for competitiveness, Juan Carlos Paiz, both members of the board of the National Agency for the Development Partnerships Economic infrastructure (ANADIE) complicates the near future of planned projects to be developed in the form of public - private partnerships.
Out of a portfolio of seven infrastructure projects estimated at $1.3 billion and which are essential to the economic development of Guatemala, only one is just beginning to see the light.
The project to build the State Administrative Center, estimated at $200 million, is the only one that has started to be implemented since the National Agency for Partnerships for Economic Infrastructure Development (ANADIE) was created in 2013.
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.
Railways, an industrial park, port terminals, and roads are concrete investment projects that will be presented during the next Guatemala Investment Summit 2013.
The National Alliance for the Development of Economic Infrastructure (ANADIE by its initials in Spanish) is preparing a series of infrastructure projects that will be presented during the 2013-Guatemala Investment Summit organized by the Chamber of Industry (CIG by its initials in Spanish) for next May, with the expectation of attracting over U.S. $1.3 billion in investments this year.
The government has announced the start of a process to attract investment for the construction of two new international airports.
The government's commitment is to build an airport for cargo in the Pacific coast, near the present Naval Base runway, in Puerto de San Jose, and one for tourists on the Atlantic coast, in the Database air Izabal.
The announcement was made by Vice President of the Republic, Roxana Baldetti, who added, "We're trying to do this using the Public-Private Partnership Act because the state does not have the resources to do it on its own and we are thinking that an investment of this nature could be made next year. "
The complex would have between 30 and 35 thousand square meters and would involve a public private investment of between $60 and $250 million.
Among the plans being analyzed by the government is the construction of a convention center to which a shopping mall and hotel would be added depending on the available resources, as "with everything together, it could mean an investment of $250 million, which is more difficult", said Peter Duchez, director of the Guatemalan Institute of Tourism. The works would include a tower for parking and road works.
The Guatemalan government is committed to public-private partnerships that encourage investment in infrastructure.
Airports, ports and national highways could be built with input from the private sector through the creation of the new Council for the Promotion of Public-Private Partnerships, which aims to stimulate infrastructure projects crucial for the economic development of the country.
The country's council for development partnerships (Conadie) will be responsible for approving investment and infrastructure projects to be carried out jointly by the government and private sector.
The Ley de Alianzas ("Public Partnerships") law will make it possible for the government to invest jointly with private companies in projects to build roads, shipping terminals, airports, power grid improvements and railways, for example.
The Ministry of Finance said that the draft Law on Partnerships for Economic Development and Infrastructure must wait one to two years.
That is the time it will take to create an agency responsible for evaluating the projects, said the Minster of Finance, Rolando del Cid Pinillos.
This agency, which will be composed of members from both the public and private sector, will plan the projects, evaluate them and rank the bids submitted for tenders.
The workshop, sponsored by the IDB, aims to present methodologies based on the experiences of Mexico and Spain, for best practices in public-private partnerships.
The workshop entitled "Partnerships for Economic Infrastructure Development" started yesterday, October 18, and is being held at the Intercontinental Hotel in Guatemala City.
A press release from the Ministry of Finance of Guatemala reads: