Costa Rica's low public infra investment causing concerns

Public infrastructure investment in Costa Rica is worryingly low, while private construction figures are rising, leading to contradictions that could cause more trouble. 

The monthly construction index (IMAE) for the private sector grew 17% in January-October compared to the five-year average, while the public works IMAE contracted 32%, according to the construction chamber (CCC).

In a video published by local media, CCC president Carlos Trejos said, “the low levels of investment in public infrastructure are of great concern, as the high investment in private construction is not sustainable if it is not accompanied by investment in infrastructure in the medium term.”

Between 1991 and 2020, public works represented 20% of the construction sector and only 10% between 2021 and 2023, according to a CCC press release.

Moreover, road infrastructure, key for trade with the region, presents serious management problems, “that affect development and fulfillment of the established terms, as the required pre-engineering steps are not adequately carried out,” the release said.

“Another topic of great concern is the lack of water availability due to the serious management issues faced by aqueducts and sewers authority AYA,” Trejos said in the video. 

Well drilling and other waterworks should be categorized as emergency projects to push them forward, including the expansion of the metropolitan aqueduct, which is pending and aimed at reducing the volume of water extracted through wells and produced in treatment plants that is not commercialized, and to alleviate shortages in Guanacaste province, CCC said.

Trejos added that variables like currency exchange, high interest rates and crime are further complicating the situation. 

“In the medium term, the variables could affect the investment climate, which will generate lower investment in construction, a decrease in the number of jobs and affect the competitiveness of our country,” he said.