Peru passes decree to facilitate PPP contracts

The Peruvian government has approved a legislative decree that improves the framework for public-private partnership (PPP) contracts. 

Through legislative decree 1550 (DL 1550), the government eliminates the need to obtain approval from the economy and finance ministry (MEF) for the budgetary capacity of a PPP project in the early stages, thus speeding up the process of drafting and signing such contracts.

The MEF had already announced its intention to reduce contracting times for PPPs, but DL 1550 is the first specific measure to do so and should be followed by further reforms to expedite PPP processes, according to specialists.

Camilo Carrillo, executive director of the infrastructure area of EY Peru, said that DL 1550 will reduce the times for carrying out projects and that the MEF assessments will now take place at later stages of the process, which is similar to what is done in other countries in the region, such as Chile, Colombia and Panama.

With the aim of empowering investment promotion agency ProInversión, the role of the MEF in PPPs should only be to evaluate the budgetary capacity and risks, he added in a post on LinkedIn. 

To continue facilitating these contracts, Proinversión should also be the only one responsible for approving evaluation reports, structuring the economic models and producing the updated versions of the contracts, Carrillo said.

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President Dina Boluarte announced that she will push to advance the project to build line No. 3 of the Lima metro this year. 

According to the transport ministry (MTC), this initiative will cost around US$7bn and will be carried out through the government-to-government mechanism. 

Earlier this year, funds for 252mn soles (US$68mn) were approved to hire a project management office (PMO) and start works on the required studies.

In addition to the preparations for line No. 3, the president announced that the government will also move forward with the project profiles for complementary works on line No. 1 and No. 2 of the metro, the latter of which is still under construction. 

"The profile of the Lima East Rail Corridor-Ricardo Palma improvement project will be completed during the fourth quarter of the year, which will have connections with lines 1 and 2 of the Lima metro and at a Metropolitano [corridor] station," Boluarte said at a press event.

Finally, Boluarte announced that definitive studies will this year begin for the execution of the Lima cable car system, which will connect the districts of Independencia and San Juan de Lurigancho.