The implications of Peru's plans to create an infrastructure ministry

President Dina Boluarte announced during her national holiday speech that Peru's government will present a bill to create an infrastructure ministry, which caught the attention of investors and sector specialists, although questions about competencies and proper functioning still require answers.

The ministry is expected to oversee, among others, the recently created infrastructure authority (ANIN), the investment studies and projects agency, as well as investment agency ProInversión, which is part of programs and projects currently assigned to other ministries.

Boluarte said the creation will not involve any additional costs.

When previous governments created entities like reconstruction authority ARCC or urban transport agency ATU to tackle poor performance of existing institutions, the results were not necessarily positive.

Juan Carlos Cárdenas, an infrastructure lawyer and partner at Damma Legal Advisors, told BNamericas that ensuring high standards of transparency at the new ministry is key to minimize acts of corruption, but the government seems to have other priorities.

Luis Miguel Castilla, a former economy and finance minister, wrote on LinkedIn that various risks arise in the case of Peru, even though infrastructure ministries have spurred development in other countries.

He added that the ministry must be protected from outside pressure, especially considering Peru's history of corruption, and that officials must be selected on merit. 

Additionally, he wrote, "how would the ministries that lose functions (MTC, housing and agriculture, etc.) be left? What is the loss of specialization when merging different sectors and with projects of different nature (national roads of Provías Nacional and small social projects of [development agency] Foncodes)?"

Castilla told local media that the ministry's budget of over 15 billion soles (US$4bn), which will be one of the largest, adds complexity.

Peru's infrastructure gap by 2040 is 363bn soles, and the economy and finance ministry registered progress of 11.7% between mid-2019 and mid-2022, or 22.5% cumulatively.