Chile aims to boost private investment in US$15bn of concessions

Chile's government plans to tender a total of 60 concession projects worth US$14.6bn by the end of 2023, public works minister Juan Andrés Fontaine told an event on Thursday.

Speaking during the annual concessions congress of concessionaires association Copsa, Fontaine said that his ministry (MOP) is working to modify the framework for private infrastructure initiatives to boost the mechanism.

MOP is close to finishing a draft for the changes to the framework, which will include partial financing of studies by the state and higher premiums for those who present private projects that end up being declared of public interest, the minister said.

During his presentation, Fontaine also outlined MOP's concessions portfolio, which is divided into:

– Highways: 24 projects worth US$9.6bn

– Hospitals: 18 projects worth US$2.6bn

– Airports: 7 projects worth US$504mn

– Water reservoirs: 2 projects worth US$823mn

– Light rail and cable cars: 5 projects worth US$890mn

– Others (sport stadiums, transport corridors and public buildings): 4 projects worth US$125mn

Fontaine highlighted that the government plans to tender US$2.4bn in concessions per year up to 2023.

"When you analyze MOP's project portfolio, what you find is projects with high profitability that should have been carried out years ago," he said, adding that the delayed infrastructure projects could hinder the country's growth potential.

After the address, Copsa head Leonardo Danieri expressed optimism regarding the new framework for private initiatives, saying that "with the current framework premiums are too low. But what is mostly hindering the presentation of projects nowadays is the waiting periods for approval and review." He said that in some cases projects are stuck for a decade before a tender is called.

When consulted about the premiums, Danieri warned that if they increase too much they could harm competition. "5% of the total investment cost would be an appropriate amount," he said. Currently, the premium is 3%.

UNBLOCKED PROJECTS

Fontaine also spoke at the congress about MOP's efforts to speed up concessions already awarded that have been blocked for different reasons, which have a combined value of US$4.9bn.

Also, the minister spoke about other projects that have overcome obstacles since the current administration took office in March:

– Cau Cau bridge partial reopening and repairs plan

– Electronic toll gates for Santiago's access highways

– Agreement with Las Condes and Vitacura municipalities regarding works on the AVO I expressway.

– Solution to delays in the expansion of Santiago's airport

– Salvador hospital construction (works to start soon)

– La Punilla reservoir (works to start soon)

– Bicentenario cable car (agreement with Providencia municipality to be announced Friday)