Peru's new leader awaits private investment with 'open arms'

Peru's new government will work to eliminate all bureaucratic obstacles to infrastructure, mining and energy investment within six months to drive economic growth and create jobs, newly sworn-in President Pedro Pablo Kuczynski said.

Emphasis will be placed on roads, airports, trains, water and sewerage projects, Kuczynski said in a 40-minute inaugural speech in Peru's congress on Thursday attended by the presidents of Mexico, Argentina, Colombia, Chile, Ecuador and Paraguay.

"Projects are stuck in bureaucratic problems which we plan to untangle in the next six months," said Kuczynski, a 77-year-old former investment banker who edged his rival Keiko Fujimori in a run-off election last month. "We're going to eliminate all the multiple obstacles to private investment, which Peru awaits with open arms."

Kuczynski's predecessor Ollanta Humala awarded a record US$20bn in public-private partnership infrastructure concessions during his five year mandate, but bureaucratic issues and social conflicts have caused years of delays, according to industry groups such as SNMPE and AFIN.

Kuczynski seeks to fast track US$25bn in delayed infrastructure projects including line No. 2 of the Lima metro, the southern Peruvian natural gas pipeline, the Lima and Chinchero airports and Lima-Ica highway. He has also pledged to spur investment in major mining projects such as Quellaveco, La Granja and Tía María.

The government will need backing from the 130-member congress to overturn conflicting legislation that has held up investment, Kuczynski said. Fujimori's Fuerza Popular controls congress with 73 seats compared to Kuczynski's Peruanos por el Kambio movement with 18.

"The country doesn't have time for ideological discussions because five years is a short period for a titanic task," Kuczynski said.

CONFLICTS

Kuczynski, who inherits 212 ongoing social conflicts that have held up projects including Newmont Mining's US$4.8bn Minas Conga and Southern Copper's US$1.4bn Tía María, said his government will ensure companies meet environmental standards and will seek dialogue with communities near mining and hydrocarbons projects. Environmental protests left at least 50 dead and 750 injured during Humala's government, according to NGO Cooperacción.

"We'll seek to persuade and explain, community by community, the costs and benefits that investment in basic and extractive industries brings in terms of employment and taxes," he said. "We need to deal with conflicts through dialogue, not confrontation. We won't go against the will of the people."