Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Tuesday, May 31, 2022

Peru tries to unlock Public-Private Partnerships and accelerates the 2022-2023 project portfolio

Legislative Decree 1,543 ordered the creation of OGEP (Project Management Offices) in public entities of the three levels of government to improve project management in PPPs. The Ministry of Economy and Finance is currently working on the OEGEP regulation: The guidelines and methodologies established in regulations is expected to be approved by the end of the year.

The exit of Azteca from the National Fiber Optic Network and the cancellation of the last bidding process show complications of the Peruvian market for the constitution and positive evolution of PPPs. In fact, ProInversión has gone through ups and downs in recent years in its authorities, criticized for the slowness in executing projects. To speed up the schedules in telecommunications, energy, transportation and infrastructure initiatives, at the end of March the Executive Branch established measures to improve project management and private investment promotion processes, through Legislative Decree No. 1543.

The analysis made by the ministry of the difficulty in project management shows three challenges, as the government portfolio explained during an online event: high complexity of projects for a long-term relationship between the public and the private sector; weak governance, so the institutional framework is affected; and little articulation between areas, despite the various specialties required. Among operational challenges for the execution of projects, delays were observed in the adjudication, in tasks such as land acquisition, release of interferences and financial closures, of works stoppage and risks of unfavorable controversies.

Among the main measures, the creation of the OEGEP (Specialized Organs for the Management and Execution of Projects) was ordered to streamline PPPs. These entities may be implemented in public entities that have a project or portfolio of PPP projects with a total investment cost equal to or greater than 1.3 billion soles. The OEGEP will deal with comprehensive management and contractual execution, as well as governance structures and improvements in processes and instruments.

At the moment, a progressive implementation is already planned so that, in the next 12 months, 2 OEGEPs are implemented in sectors with projects prioritized in the PNIC (National Infrastructure Plan for Competitiveness).

In the work schedule for 2022 with the regulation of the decree, established that next September an advisory commission will be created and the guidelines and methodology will be approved in December.

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