Latin America Must Build Local Government PPP Capacities

Latin America must build the capacities of its local governments to explore the Public Private Partnership (PPP) mechanism for implementing infrastructure projects, because this instrument, when used properly, can impact national development, as well as to raise the quality of life of the people.

The remarks were made by Antonio Silveira, Vice President of Infrastructure at CAF, as he opened the Workshop on Public Private Partnerships (PPPs) held in Lima, to present the PPP Guide for Regional and Local Governments, and to train national, regional and local officials in the use of this mechanism and how it should fit into strategic planning tools in urban settings.

Silveira noted that the rapid growth of Latin American cities implies a greater need for infrastructure and public utilities for an adequate standard of living in urban settings, and said that this is not always possible with public budgets, and in some cases we need to resort to other models that involve private sector financing, and PPPs can be a tool that can help us keep the pace of investment in infrastructure projects, which are key to improving the quality of life of millions of Latin Americans.

He also noted that CAF supports national efforts to achieve sustainable development, and that the workshop was organized precisely to train sub-national authorities in the preparation, design and management of public-private partnership contracts, which are essential elements in these processes.

Silveira also stressed the importance of the guide, because human and financial resources are usually concentrated in central governments, but PPP opportunities lie also in regional and local governments. “In order to have a positive outcome in PPP actions, the public sector must not only be able to prepare and design this mechanism, but also to manage it, as it entails a long-term interaction to manage this special condition.”

Alberto Ecco, acting executive director of ProInversión, emphasized that the primary goal of PPPs has been undermined over time, and that the public and private sectors are therefore constantly striving to improve it and use it in the country. He added that these CAF-led initiatives produce knowledge, help access technology and share experiences, in order to resume the specific goal of PPPs, as an essential tool to implement vital projects, to energize economic growth and to enable delivery of services that raise living standards of all Peruvians.

He stressed that for ProInversión, decentralization is an essential axis in the design of PPPs and the promotion of private investment in the nation, and explained that his institution has a decentralized management focusing on works for taxes, such as the promotion of the public-private partnership scheme at regional governments, but it also has regional and itinerant teams that keep permanent contact with regional governors and mayors for the promotion of this mechanism.

The PPP Guide for Regional and Local Governments was presented by Mónica López, coordinator of the PPP Program of the Vice Presidency of Infrastructure at CAF. Meanwhile, the workshop was led by Jordi Salvador, co-author of the PPP Guide and Researcher of PPP for Cities, Luis Natal del Carpio Castro, Project Manager at ProInversión; and Lucas de Marcos, Colombia Country Manager at FCC Aqualia.

The event brought together more than 70 participants, including officials of ProInversión, the Ministry of Economy and Finance, the Ministry of Education, the Ministry of Health, the Ministry of Housing, Construction and Sanitation, the Ministry of Transport and Communications, OSITRAN. Other participants included representatives of the Finance Development Corporation (COFIDE), Social Health Insurance of Peru (ESSALUD), National Superintendency of Sanitation Services (SUNASS), Lima Water and Sewerage Service (SEDAPAL), Metropolitan Municipality of Lima, Provincial Municipality of Trujillo, Trujillo Metropolitan Transport (TMT), Provincial Municipality of Piura; as well as authorities of the regional governments of Lima, Arequipa, Ayacucho and Ica.