The executive director of Peru’s private investment promotion agency, or ProInversión, said Friday investment in the country’s main infrastructure projects in 2010 is expected to reach more than $2 billion, according to state news agency Andina.
Jorge León said $720 million is expected to be invested in energy projects. This includes the awarding of a 30-year transmission line concession aimed at strengthening interconnection between Peru’s center and southern regions. The 500-kilo volt line will start in Chilca, a town about 40 miles south of Lima, pass through Marcona in the Ica department and finish in Montalvo, located in the southern Moquegua department. The construction of the line is expected to take 30 months and may require a $450 million investment.
Investment in Peru’s agriculture sector may total $609 million in 2010. The largest investment in agriculture is expected for the Majes-Siguas II irrigation project located in Peru’s Arequipa department. The project’s concession holder will design and build the Angostura dam, water transfer tunnels, and a distribution network that will irrigate 38,500 hectares in Siguas and 8,000 ha in Majes. León said it may require $344 million to finance.
Investment projects are also expected for the construction of ports, airports, roads, and sanitation infrastructure. In total, the government is seeking $4.2 billion for 50 projects to cover current gaps in the country’s infrastructure.
A 2007 report published by the World Economic Forum said Peru had the second largest infrastructure gap in the region – behind Bolivia – hindering the country’s growth prospects and poverty alleviation strategies. The report said Peru was making significant progress in improving the environment for private investment in infrastructure projects.
However, a recent study co-published by Peru’s national association of infrastructure investors, or AFIN, and the ESAN Graduate School of Business said Peruvian bureaucracy was holding back the development of public-private co-financing of Peruvian infrastructure projects, daily El Comercio reported.
The dean of ESAN, Sergio Bravo, said they have seen an increase in the time for setting up new public-private co-financing projects. “There is an extensive procedure for the development of public-private associations co-financed by the state. As well, private co-financed initiatives have been prohibited,” El Comercio quoted Bravo as saying.
In 2009, only three of the governments 12 infrastructure projects prioritized were completed, the president of AFIN, Gonzalo Prialé, said. He said to close the infrastructure gap $38 billion needs to be invested in Peru.
“As well, private co-financed initiatives have been prohibited.” What, exactly, has been prohibited? Entirely private infrastructure projects not involving the state?
Craig