Peru to award US$5.8bn in PPPs through 2021

Peru's government plans to award US$5.79bn in public-private partnership (PPP) infrastructure concessions over the next two and a half years, as President Martín Vizcarra seeks to jump-start the country's sluggish economy, a senior official said.

Concessions will include the port of San Juan de Marcona, the longitudinal highway, Lake Titicaca sewerage water treatment plants, the Nueva Piura-Frontera power line, schools and potable water projects in Lima, finance minister Carlos Oliva said.

Work will also get underway next year on another US$11.0bn in investment projects, including the Jorge Chávez Airport expansion, the ports of Salaverry and Pisco, PetroTal's Block 95 oilfields, regional broadband projects and mining projects built by Anglo American, Chinalco and Minsur, according to Oliva.

Public spending and private investment this year are on track to grow 14% and 4.7%, respectively, with GDP growth estimated at 3.9% and the fiscal deficit running at 2.7% of GDP, Oliva said.

The government has also fine-tuned the state contracting law to speed up the process, and has created a 1bn-sol (US$300mn) fund to finance microenterprise, he added.

President Vizcarra, who replaced Pedro Pablo Kuczynski in March, seeks to accelerate US$25bn in delayed infrastructure projects and work on a US$8bn flooding reconstruction program. He has also set out to implement sweeping political, judicial and labor reforms in the wake of a series of corruption scandals.

"Peru has all the tools, and the expectation is that growth in 2019 will top 4%," Oliva told reporters in Lima. "The political noise should abate in the coming months, which should allow us to carry out the reforms we have proposed."

Infrastructure industry association AFIN warned that bureaucratic obstacles have held up US$5.33bn in infrastructure projects, while state investment promotion agency Proinversión awarded only two PPPs this year.

Projects on the backburner include broadband concessions in Áncash, Arequipa, Huánuco, La Libertad, Pasco and San Martín; natural gas distribution; the Carabayllo power line; and the Colca and Jalaoca mining projects, Lima-based newspaper cited AFIN president Leonie Roca as saying.

PIURA

In other infrastructure-related news, Vizcarra inaugurated the upgraded Huancabamba-Socchobamba highway and oversaw the start of construction on three hospitals in Piura region – Huarmaca (270mn soles), Huancabamba (100mn soles) and Ayabaca (90mn soles). Piura was the one of the hardest-hit regions during last year's record flooding caused by the El Niño phenomenon.

"2019 will be the year that both infrastructure and the economy take off," Vizcarra said in broadcast comments. "Next year, we're going to start work on schools, sewerage services, hospitals and roads, projects that generate development."