Spotlight: The status of El Salvador’s US$545mn PPP infra portfolio

After pausing the tenders for its first two public-private partnership (PPP) projects this year, the government of El Salvador has resumed plans to continue opening bidding processes for its US$500mn-plus PPP infrastructure portfolio.

The country’s first PPP project was awarded in October, the second is expected to be launched before the year ends and a dozen more are awaiting the government’s okay to begin bidding. 

According to the recently updated website of El Salvador’s investment and exports promotion agency (Proesa), the agency that oversees the partnerships, El Salvador has 14 PPP projects in the pipeline. However, during an international webinar in November, Canada’s ambassador to El Salvador, Carolina Guay, and other officials said the country’s portfolio was made up of 17 projects worth US$545mn. 

Yet, more investment opportunities could be presented throughout 2021 as Proesa said in a Twitter post on December 5 that the administration of President Nayib Bukele was betting on PPPs to fill the estimated US$7.5bn infrastructure gap in the country.

BNamericas takes a look at the status of the Central American country’s PPP portfolio.

Cargo terminal 

The Alutech consortium comprising Hondura’s conglomerate Emco Holding and Germany’s Munich airport operator won on October 8 the PPP project to design, modernize and operate the cargo terminal of the San Óscar Arnulfo Romero y Galdámez international airport in the La Paz department. 

The consortium will invest US$13mn in the first stage of the project and US$44mn in the second, national ports and airport authority CEPA said in a statement. The first stage involves a concession of 15 years, while the second is 20-years long. 

The modernization plans will aim to increase cargo transport capacity from almost 27,000t to 52,000t in the first stage and up to 73,000t in the second. Overall, the project is set to add 1,700m2 to the current terminal’s area. 

This is the first PPP project that El Salvador awards and its construction is expected to last 14 months, news agency EFE reported. 

The project’s original tender was launched in September 2019 and bids were expected to be received between February and March, but the coronavirus pandemic forced authorities to postpone the naming of the winning company. 

Alutech is also constructing the US$120mn Palmerola international airport (PIA) in Honduras’ Comayagua city and its offer for El Salvador’s cargo terminal concession beat the bids of some other 33 participants. 

Highway lighting and camera surveillance 

El Salvador’s second PPP project is ready to be relaunched and its application process is expected to be re-opened before year-end, the Canadian ambassador said at the webinar. 

It involves the installation of lighting and video surveillance equipment on 140km of highways in the metropolitan area of capital San Salvador. 

The estimated US$14mn contract also includes the design, installation and maintenance of the lighting and cameras. However, this is just the first stage of an overall plan that seeks to expand the project further to more than 700km of highways, she said. 

A PPP tender had already been launched by public works ministry MOP at the beginning of 2020, but, just like the cargo terminal bidding process, authorities postponed the tender indefinitely due to the sanitary crisis. 

Other projects

Other five projects have not been launched but could lead El Salvador’s PPP agenda next year as they are in an advanced stage of planning. 

One of these involves the US$120mn El Salvador’s biggest government complex building in the Antiguo Cuscatlán municipality of La Libertad department. The project is a priority given that the government’s current facilities are outdated. 

The others concern the US$20mn scientific and technological building in Zacatecoluca city, for which a cost-benefit analysis has already been concluded; the US$21mn parking center for the government in San Salvador; a new US$25mn network of custom offices and a US$75mn road to connect the north-western Acajutla municipality with the Guatemalan border. 

An additional set of 10 projects are still in planning, according to officials, and the government is working on their feasibility studies.