How local authorities in Chile can boost their infrastructure presence

More than 15mn voters are registered for Chile's upcoming municipal and regional elections, which will take place on October 26 and 27.

However, questions remain regarding the powers that mayors and governors have over investments, especially in relation to infrastructure, where planning and execution remain largely in the hands of the central government.

Think tank Infrastructure Policy Council (CPI) recently offered a series of recommendations to the gubernatorial candidates so they can develop their own infrastructure regulations and improve the way they carry out projects.

To delve deeper into the powers of local authorities, as well as the potential barriers they face in developing infrastructure, BNamericas spoke with CPI executive director and former public works minister Carlos Cruz.

BNamericas: What are the main regulatory barriers faced by regional governments when it comes to infrastructure investments?

Cruz: There are no major regulatory barriers to promoting infrastructure projects by regional governments. What there is is that many of these projects are decided in Santiago and are not necessarily what the regions identify as priorities. They only coincide with what is seen from the center.

BNamericas: Regarding the use of the concession system, it has been pointed out that the current framework would not be well adapted to medium- or small-scale projects. Would the concessions law have to be modified to facilitate the entry of regional governments?

Cruz: The concessions law is a very flexible law. Just as there are projects that come from the private sector and can be activated to be carried out through the concessions system, there can also be projects that come from the regions.

What happens is that concession contracts and the process they involve have become more complex. This means that it’s not always convenient to use this contractual model for projects with reduced amounts. The same effort is required on the part of the client, which is the public works ministry, to tender, award and supervise a smaller project as a large one, and that is a disincentive.

This can be easily resolved by adapting contracts to less complex projects and directly involving regional governments.

BNamericas: One of the positive aspects of Chile's infrastructure policy is the long-term continuity of the project portfolio. In other words, projects are not discarded as soon as the president changes, as was the case, for example, with the Mexico City airport. How could this same principle be implemented in regional governments?

Cruz: Regional governments have an infrastructure and transport officer who is in charge of the regional development strategy and territorial planning. Both instruments are used to determine the infrastructure projects that the region requires to ensure its development.

If both instruments are drawn up with high levels of participation, respecting the political transversalities and interests of the different regional actors, with a long-term view, this portfolio should survive changes in regional government.

BNamericas: Do you think regional governments should also have a say in the operation of public transport systems in their jurisdictions?

Cruz: Absolutely. In fact, when the transfer of resources was legislated as a “mirror of Transantiago” that was the idea. There are some regions where this works very well.

BNamericas: Do you think regional governments would benefit from having their own ministry or secretariat for public works, as happens in other countries?

Cruz: If you are referring to the powers vested in the regional governments themselves, I believe that they have a seed that could perfectly evolve in that direction, which are those responsible for infrastructure and transport.

If what you are referring to is having a regional counterpart in the central government, I think not. It is the function of the regional governments to assume responsibility for regional development within the framework of what is defined for the development of the country.

BNamericas: How can a conflict of interests between national and regional authorities be avoided when it comes to permitting infrastructure projects?

Cruz: There should be no conflict of powers, as long as the institutions operate with the level of technical rigor and institutional responsibility that is expected of them.

Each region has its own characteristics and, therefore, the criteria applied must take these differences into account, always bearing in mind the general interest of the country. To address the housing deficit, for example, the houses evaluated cannot be the same in Puerto Montt as in Arica. However, it is necessary to move forward in the construction of housing because it is essential to resolve the deficit we have.

This can be extrapolated to many activities that are necessary for the country to have clean energy, digital connectivity, fast transportation, quality service establishments, new water sources, all infrastructure projects for sustainable growth, according to the criteria of the United Nations.