'2024 is going to be the year of wastewater treatment plants'

Peru's private investment promotion agency ProInversión kicked off 2023 by awarding two projects, holding a series of meetings with the business sector and making important announcements on reactivating concessions through public-private partnerships (PPP) and the works for taxes (OxI) program.

José Salardi, a former production minister, was appointed executive director of the agency last December. Since then, ProInversión has stepped up its awards of the projects not contracted out last year. It has also published details on planned projects for the health and sanitation sectors.

BNamericas speaks with Salardi about upcoming tenders and the short- and medium-term outlook for the infrastructure sector. 

BNamericas: ProInversión has been holding various multilateral meetings. What is the message you're transmitting?

Salardi: It's certainly no secret that PPPs have taken a hit in recent years. The pace of awarding and development hasn’t met expectations. An initial step was rebuilding trust in the institution to reposition ourselves as a key link in project execution.

As I've had stints in the housing, transport and production ministries, and have served in ProInversión committees previously, I've managed the relationships with officials and executives and have stressed the need to speed up the execution of our pipeline.  

The reception has been good. For example, the first award that we’ve done [Spain’s Acciona Concesiones was awarded the PPP contract for the Ica-Poroma and Cáclic-Jaén transmission lines in late January] was proof of this. Four prequalified interested parties submitted offers, considering the critical period the country is going through.

BNamericas: Which companies and officials are you meeting with?

Salardi: Our current portfolio involves energy, sanitation, health and industrial park projects and we have been holding meetings with all interested operators. Some are planning to visit to hold talks.

In February, we'll host Spanish group Ferrovial to talk about the Lima beltway project. This is a project that has been in the pipeline for a long time and the goal is to declare it of interest in 1H23. With that, the project would be on track and could be awarded toward the end of this year or early next year. We’re working hard to achieve that.

On February 28 we have an event with the economy minister [Alex Contreras] and a group of companies to share our message of confidence, the updated portfolio and our plans.

BNamericas: How have you been adjusting the project award process?

Salardi: With the first award, we were very careful to define the date and communicate any adjustments. The upcoming projects will follow that line. We’ve been questioned a lot as to why ProInversión is slow and projects delayed. We’re here to mitigate that situation as much as possible. Remember that the agency is a promotional, intermediate body and has to interact with various State stakeholders.

BNamericas: What about your communication with the private sector?

Salardi: It’s important that they move at our pace. There have been cases in which they ask us for more time for the calls to bid. It’s difficult to continue postponing things. Lots of projects have their studies and are ready, so it’s a matter of bidders making the effort to come up with offers at the right time.

We gave that signal to the electric power sector. We have four projects for 2023 – we’ve already launched the first one – and there are three that will be awarded between July and August. There’s plenty of time to prepare. Predictability and timing are important for both parties.

BNamericas: The portfolio of power projects for 2023 is worth around US$1bn and for all sectors, US$3bn. What does the rest of the portfolio consist of?

Salardi: We have the Essalud hospitals in Piura and Chimbote, there’s the 4G spectrum project, and the Puerto Maldonado wastewater treatment plant in Madre de Dios region.

We’re about to declare Marcona port a project of interest. It will probably be a direct award between September and October. There are investments of around US$600mn in that project.

The Ancón industrial park is another project scheduled for the second half of the year. The initiative involves approximately US$750mn. That would be developed through projects in assets – an investment promotion modality that is carried out in assets owned by public entities.

If we declare the Lima beltway project of interest no later than 1H23 – and the criteria of interested third parties are met – it could also be awarded between September and October. That would involve US$2.5bn, which increases the portfolio significantly. The timing is still being evaluated.

BNamericas: Are there dates established for the awards?

Salardi: We’re finalizing them. The bulk will be between late April and August, when we will have the three power projects, the health projects and the Maldonado wastewater treatment plant. Toward the end of this month, we will start making announcements. We want to step on the accelerator and have the bidders accompany us.

BNamericas: What’s happening in 2024?

Salardi: 2024 is going to be the year of wastewater treatment plants. We’ve optimized the schedules and we expect to declare four WWTPs and a desalination plant as being of interest by the end of 2023. These awards will be made next year for sure, given that there’s interest in the sanitation sector and the big operators are already present.

On the other hand, the MTC [transport and communications ministry] has once again entrusted us with the Huancayo-Huancavelica railway. We’re making adjustments to relaunch it. The same with section 4 of the Longitudinal de la Sierra highway project. In the coming months, we’re going to tell the market they’re being relaunched.

The situation with the Lima potable water supply project is similar. We’ve acted quickly with Sedapal, we have a defined line and expect it to be awarded in early 2024.

BNamericas: An important part of ProInversión's work is adding new initiatives to the portfolio. What projects are you considering?

Salardi: The MTC is likely to entrust us with the project for the national fiber optic backbone network [RDNFO]. Although the 5G projects will come at a later time, it’s an aspect that we’re also discussing.

We’ve talked with the health ministry because there are other hospitals that may be of mutual interest. We also have a meeting with the [2019 Pan American Games] legacies team to analyze what we can do with the athlete’s village to take advantage of the existing infrastructure.