Ecuador submits draft road PPP contract for comment

Ecuador's public-private investment department will receive comments until June 27 on the draft contract for PPP projects, which will be used as the basis for several bidding processes starting next year once it is finalized.

The draft was produced in accordance with funding and advice provided by Latin American development bank CAF and is based on Colombia's fifth generation (5G) infrastructure contracts, Ecuador's public-private investment secretary, Pablo Cevallos, told BNamericas.

“The 5G model was used, which includes the experience of Colombia's 4G projects, but adapting them to the Ecuadoran reality, bringing together the best practices for road contracts,” Cevallos said.

Submitting the draft contract for comment from the different stakeholders involved in the road infrastructure sector is intended to strengthen it to achieve the best possible results in the ensuing bidding processes.

The official explained that the draft contains the respective clauses of the contractual relationship, as well as other specialized clauses regarding the bankability of the projects and for appropriate distribution of risks.

To strengthen the legal security that projects require, the basic contract also establishes mechanisms for settlement of disputes.

In the coming weeks, the public-private investment department will sign an agreement with the IFC to structure the first three road projects in the PPP portfolio, which are the Manta-Quevedo, Montecristi-La Cadena and Pifo-Y de Baeza highways.

The IFC will advise on the process and hire specialized consultants for each project.

Once all observations and comments are received on the draft contract, it will be delivered to the structurers so that they can add any comments on possible adjustments they believe may be required.

Cevallos said he thought that the inter-institutional PPP committee would approve the contract model by the end of the year.

“The contract is a complex and extensive instrument. We can't rush to gain approval, we will take the necessary time to consult with all the stakeholders,” Cevallos said.