Tender and permit barriers compound uncertainty in Chile’s infra sector

Long tender periods and permitting processes are inhibiting the definition of schedules for infrastructure projects in Chile, in turn affecting the country’s investment plans.

“The main difficulty is in the tendering processes. Sometimes they get delayed and the [projects] with a defined schedule get pushed back, and those without schedules are also pushed back until it becomes known when the tender is going to be carried out,” the CEO of investment consultancy CBC, Orlando Castillo, said in response to a question by BNamericas during a webinar hosted by the school of engineers.

According to Q2 data collected by CBC, investments of US$52.2bn are being planned in projects with defined timelines through 2027. The biggest chunk, US$20bn, is for the mining sector, followed by US$17.2bn for public works. CBC also identified 15 non-hospital concessions worth US$3bn. 

However, 17 projects for US$2bn have potential to be finished through 2027 but are lacking construction schedules. Castillo said tender delays are the biggest administrative obstacle to construction schedules for public works, adding that archeological findings, which entail another set of permits, exacerbate the issue.

“It has happened with metro and other projects with archeological findings, and that causes schedules to stop more indefinitely,” he said.

Experts called for a reform to the country’s monuments council, which is in charge of assessing archeological findings and authorizing works to continue, but has been criticized for long decision-making processes.

Castillo also criticized that not enough hydrogen projects are being facilitated, despite official efforts to boost the sector.

“There’s a global race that isn’t only Chile’s. There are a lot of countries thinking about the hydrogen demand that will be required from 2030 onwards. But there are also technological issues that haven’t been solved,” he said, adding that once the sector takes off, it will play a key role in Chile’s project pipeline.