PPP regulations could attract US$27bn infra spend this year - CMIC

Tuesday, April 17, 2012

The implementation of enabling regulations for Mexico's public-private partnership (PPP) law could result in 350bn pesos (US$26.7bn) of private sector investment in infrastructure this year, according to national construction chamber CMIC.

"The national budget has already been approved for this year, but if the regulations were approved there would be an additional 350bn pesos," CMIC president Luis Zárate said at a press conference.

Mexico's PPP law was approved by the senate in December 2011 and published in the official gazette in January this year. However, enabling regulations have yet to be published.

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While the approval of the PPP law was "a great achievement" for Mexico, "a law without an enabling act helps nobody," according to Zárate.

PPPs were already carried out in Mexico prior to the current law; however, the new framework aims to expedite infrastructure projects and attract significant new levels of investment.

CMIC has called on the finance and public credit ministry (SHCP) to publish regulations, without which the private sector cannot take advantage of the law.

"If we don't get our act together, investors will go to other countries," the spokesperson said.

The infrastructure chamber also highlighted the need for proper project planning, saying the government should allocate between 3% and 5% of a project's estimated cost for planning.

"The government should have a pipeline of projects ready to kick off as soon as the federal budget is approved," Zárate said.