Permitting reform high on Chile’s 2024 infra agenda

A reform to speed up permitting will be a key item on Chile’s infrastructure agenda in 2024, following years of complaints over slow processing that has hindered project development.

A reform bill could be submitted to congress next week, while President Gabriel Boric said the debate should be as short as possible.

The reform is part of a fiscal pact the main political parties signed last year after a proposed tax reform aimed at increasing revenue to fund spending was rejected by congress. 

The pact also includes bills to combat tax evasion and avoidance, as well as incentives to boost employment and benefits for the middle class.

ENVIRONMENTAL EVALUATION

By November, 437 projects worth US$54.1bn were under environmental review, according to evaluation agency SEA.

Of these, 158 worth US$18.2bn corresponded to energy projects, 70 for US$9.5bn to real estate, 50 for US$376mn to environmental cleanup, 12 for US$3.36bn to transport infrastructure, 12 for US$6.04bn to water infrastructure and five worth US$4.54bn to port infrastructure, among others.

Public and private actors have repeatedly criticized long environmental evaluation times, especially for projects submitted with an environmental impact study, which must include citizen participation processes and other strict proceedings.

SEA has also approved a falling number of projects in recent years. 

The government proposes to scrap a ministerial committee that acts as an appeals body when any SEA decision is contested.

This body has been criticized as being guided by political bias rather than technical considerations, although concerns about abolishing the committee have also emerged. 

A reform of the environmental evaluation system (SEIA) would also scrap evaluation committees (COEVA) that are formed whenever a project has to receive a final vote and are headed by government-appointed experts that are overseeing a specific economic sector in a region where proposed projects are located. 

Regional SEA branches would carry out the committees’ tasks.

Other aspects include incentives to launch citizen participation early and establish accumulative environment impacts as an evaluation criterion.

Officials insisted that the reform would speed up permitting but not relax any environmental protection regulations.

SECTORAL PERMITS

Under the reform, an agency would be created to centralize over 380 sectoral permitting processes that are currently handled by different institutions.

But the entity would not take over the processes and instead monitor them to ensure that legal deadlines are met. It would also promote coordination between agencies, issuing reports and statistics, and provide instructions and recommendations on permitting improvements.

Other functions include managing unified sectoral permitting system SUPER, where users can search for information and permit processes online.

Another aspect of the reform is the creation of a threshold system in which certain projects may skip some permitting proceedings, depending on their size. How these thresholds will be established will depend on the sector. 

Projects with a low threshold would only need to make a formal statement instead of seeking a specific permit, such as requesting authorization to start construction. There would also be medium and high thresholds.

According to the economy ministry, current times to obtain these permits largely exceed legal limits, with construction permits from water regulator DGA taking up to 800% longer than allowed.

MONUMENTS COUNCIL

Archeological findings are another major concern, as works have to be halted until artifacts are assessed and relocated.

These functions are overseen by the monuments council, but the institution has become slow to respond, leaving projects paralyzed for months. Council members said the entity does not have the capacity to deal with all requests.

The monuments council registered permit requests related to relocation for 700 projects by November, and processing times exceeded legal limits by 200%, according to the economy ministry. 

Projects that have been affected by this backlog include Santiago’s metro line No. 7 (US$2.5bn), a new hospital in Puerto Varas (US$288mn) and section 2 of the Américo Vespucio Oriente highway (US$815mn).

The overhaul of the council will not be part of the reform bill, however. Instead, the government will add points aimed at speeding up reviews to a bill that is in the senate. 

MARITIME CONCESSIONS 

Some 100 projects are pending maritime concession authorization from the armed forces, and waiting times exceed legal deadlines by as much as 700%, according to the economy ministry.

These authorizations are key to build desalination plants, and have been cited as a key bottleneck for such projects, alongside environmental evaluations.

One measure of the fiscal pact includes adding recommendations to a bill that has been in the senate since 2012, a key point included aiming to transfer the authority to grant these concessions to the national assets ministry.