Paraguay construction chamber steps up efforts to help reduce infra gap

Paraguay’s construction chamber, Capaco, is launching a research center with the aim of influencing infrastructure policies and help local firms, as the country grapples with a US$30bn infrastructure gap that may also stifle other sectors.

The center starts operations on October 28 and “will benefit the sector by generating relevant data to support all actors in operative planning, opportunity identification, and risk mitigation,” the chamber told BNamericas via email. 

It will carry out cost analyses, monitor market trends, effects of public policies, supply sales, employment and equipment imports, among others.

The government is facing pressure to reduce fiscal deficits after spending rules were relaxed amid the COVID-19 pandemic and is betting on private investments to continue infrastructure works, which are key for exports. 

In July, Moody’s cited the infrastructure efforts of successive governments and the benefits they generated for commerce as one reason for the upgrade of the long-term rating to 'Baa3'.

The public works ministry (MOPC) plans to invest US$5.5bn in 2023-28, of which nearly US$1.5bn corresponds to mechanisms such as public-private partnerships, concessions and turnkey contracts.

Capaco's new center will contribute to these plans by providing research that identifies needs, problems and opportunities by using hard data and independent analysis. 

“Our idea is that, through reports that will be periodically issued, we will be able to establish strategic alliances with public institutions, financing agencies and sector experts,” Capaco wrote. 

The chamber also aims to support small and medium-sized contractors.

“The center’s analysis and investigations will provide updated information on market opportunities and trends, costs and its state, as well as foment cooperation between companies to strengthen their position within the sector,” Capaco added.

A communication channel will be established that allows members access to statistics and reports. 

While construction firms have benefited from the infrastructure efforts of successive governments, they have also faced difficulties because of increased costs and payment delays.

MOPC also finished paying a US$330mn debt with contractors earlier this year. The debt resulted from a policy of the previous government (2018-23) under which contractors could transfer the right to charge for work certificates to local banks.

Firms ended up claiming that the mechanism was not sustainable, as banks discounted interest from the payments for work certificates at rates companies could not work with.

"There are huge challenges in construction and we want to always be at the vanguard," Capaco said.