Bidding rules for NCRE projects now include obligation of payment in 30 days and fines for non-compliance

This is an automated translation of the original release, published in Spanish.

PRESS RELEASE from the Ministry of National Assets of Chile
December 29, 2022

The public real estate bidding process for Non-Conventional Renewable Energy (NCRE) projects, developed this year by the Ministry of National Assets, had a new and important element: the obligation to comply with the Law on Payment within 30 days.

This modification introduces an important factor of justice in the bidding process, since it will allow, from now on, to contribute to solving a long-standing problem for contractors and subcontractors who for years have been left unprotected in various situations of non-payment by concessionaires.

This change in the bidding bases responds to a joint effort between the ministries of Energy and National Assets. Starting in 2022, applicants for the bidding processes for NCRE projects must certify annually that both they and their contractors and subcontractors comply with the commitment to give "strict and full compliance" to the regulations contained in Law No. 21,131 of payment within 30 days, and in case of non-compliance, the concessionaires risk fines that reach up to 40 UF.

The Minister of National Assets, Javiera Toro, and her Energy counterpart, Diego Pardow, met on Thursday 29 to review the positive effects that this modification will have on the bidding bases for NCRE projects.

“This is a modification that introduces an important factor of fairness. For years, many contractors and subcontractors have been harmed by the delay or non-payment of the concessionaires, with terrible economic consequences for many of them. Now we are helping to correct this problem. Those who develop projects in fiscal areas must be especially committed to complying with these rules, because the use of assets that belong to all must be oriented towards the common good and social justice,” said Minister Toro.

In this regard, she added that this change in the rules of the game reflects that "indeed, the economic impulse can be balanced with criteria of necessary justice in the relations between the economic actors, large and small, who collaborate in this industry, so that they participate with guarantees and protection.”

After the meeting, Minister Pardow highlighted that “when I was in Antofagasta, I spoke with several of those affected by these companies, including Paola Vera, and they asked me directly for help. That is what we are doing today, we are fulfilling one of the requests made to us by people who have been defrauded.”

Pardow explained that "decarbonization is not only an opportunity to build cleaner cities and improve people's quality of life, it is also an opportunity to bring complexity to our economy and add value together with SMEs and the world of work We hope this contributes to those goals.”

Tenders 2022

This year, 2022, the Ministry of National Assets has put 91 public properties up for auction, grouped into 28 processes. Of the 16 processes published in December, 36 properties have been tendered for NCRE projects; another 7 for industry; 9 for agricultural land-family/rural agriculture- and the remaining 4 for other uses such as real estate, tourism and equipment.

The land portfolio for Non-Conventional Renewable Energy (NCRE) projects is a concrete contribution to the country's necessary energy transition, as well as to meet the carbon-neutrality goal by 2050, embodied in the Framework Law on Climate Change.

The 36 properties tendered this year for ERNC add up to a total of 14,814 hectares, 54% of the total area in tender and are also concentrated in the first 4 regions of the country, especially in Antofagasta, where 53% of the offer and 76% of the surface.

In the tenders for this 2022, a public property stands out in Mejillones, Antofagasta Region, for the first tire reuse project in Chile. With this, the State will be able to meet the goal demanded in the Law of Extended Producer Responsibility (REP) of promoting concrete actions for the reuse of polluting products.