The construction entrepreneurs They did not show much enthusiasm for the proposal Regime of Private Initiative as a mechanism to promote the implementation of infrastructure works, as the Government intends.
According to industry sources, There are very few projects that could be profitable for private exploitation, They therefore assume that the Government should abandon the principle that the market is the best mechanism for allocating resources if it wants to solve problems, especially in the country’s most remote provinces.
Through decree 713/2024 published in the Official Gazette this Monday, the Government regulated a new section of the Basic Law which is considered a fundamental pillar for the country’s economic development.
The rule establishes that the The Ministry of Economy will be the implementing authority of the Private Initiative Regime. Projects may be submitted to the Treasury by request of the Government or by presentation of companies that will have to justify the public interest of the initiative.
In turn, The implementing authority will have to develop and manage a project database. A Any promoter company that is considering submitting an initiative will also have to submit to a call for tender. to compete with other firms. Only one consortium may be part of it.
Among other requirements, the Government asks the promoter companies to take out insurance for 0.5% of the value of the works as a guarantee that they will participate in the public tender. If they do not do so, the policy is executed.
The similarities with Macri’s PPP
The scheme is similar to the Public Private Partnership Program (PPP) that Mauricio Macri’s government tried to promote, which did not work, among other things, due to Argentina’s own economic instability. This scheme had similarities with initiatives in Chile and the United Kingdom.
Business sources told Scope his doubts regarding the Government’s idea, because They consider that only some infrastructure projects can be profitable for a private company. These are those located near large urban centers.
This would be the case of a high-traffic route or highway, a project that the construction company can then manage by charging a toll. This is not the case for a remote route in a province with a low level of use.
What has come to light in recent weeks, according to sources in the private sector, is that the National Highway Authority is trying to start some 120 projects throughout the country. “Each one of them is worth $2 billion, so at least $240 billion would be needed,” said one businessman.
It is very It is difficult for an Argentine company to advance its own financing of this type. You could say that it would be impossible.
They are the same problems they had in 2018 when the Macri government’s inflation went wild And then, those consortia that had won bidscould not afford the costs of the increase in interest rates and insurance policiesCurrently, a surcharge of at least 15 points that marks Argentina’s country risk implies that financing is closed.
Source: Ambito
