Uruguay still a favorable environment for infra investment – Montt Group

Uruguay still represents a positive environment for infrastructure investors in spite of some recent headaches, according to the CEO of Montt Group’s branch in the country. 

“I believe that the government will continue to support investors [in infrastructure]," Perla Julián, CEO of Montt Group in Uruguay told BNamericas during a webinar about the advantages of Uruguay for investors.

She highlighted the country’s regulatory framework, geographical location and logistics infrastructure, such as the port of Montevideo, as great positives.

However, the port of Montevideo has become the center of an international arbitration case against the Uruguayan state by port operator Montecon over an agreement that extended the concession of the specialized container terminal operated Belgian company Katoen Natie.

This deal allowed the government to avoid a US$1.5bn lawsuit that the Belgian firm was threatening to take to the International Centre for Settlement of Investment Disputes (ICSID) over various disagreements with the government, paving the way for Katoen Natie to commit US$450mn in investments. It also meant that the company was granted priority for container operations, which Montecon claims breaches free competition regulations.

Julián said that the dispute has a political component that will have to be monitored closely, but added that “this doesn’t mean that the port’s development or that companies that operate in the port will be affected.” 

Meanwhile, last week Montevideo department rejected a proposal from the finance ministry and the local administration that would have granted access to a US$70mn loan from the Inter-American Development Bank (IDB) for water and waste management investments. 

Even so, Julián said that there are still plenty of opportunities for investors to participate in waterworks financed by the departmental government. 

The Montevideo administration is now restructuring its entire development plan following the failed vote last week, in order to define which projects will be funded with its own resources, local Daily El País reported.

CHINA FTA

Another advantage for investors in Uruguay underlined by Montt Group is the list of countries with which it has agreements to prevent double taxation, such as the UK, Canada, Japan, Spain, Germany and Chile, among others.

Uruguay is also in talks to sign a free trade agreement with China.

When BNamericas asked Julián which sectors of Uruguay would benefit from such a deal, she said that, at first glance, agriculture would gain the most.

The deal “is in the information exchange phase and we still don’t have an official text that we could analyze. When we have it we'll be able to say with more certainty which sectors would be benefited,” she added.