Chile aims to speed up approval of projects involving US$70bn

Chile’s sustainable project management office (GPS) is looking to speed up approvals of 231 investment projects worth US$70bn over the next five years, saying bureaucratic evaluations are causing unnecessary delays.

The strategy involves five components: strengthening internal management, streamlining evaluation processes, digitization, solving coordination problems between agencies and giving legal certainty to investors.

“Permits are the area in which we are worst ranked,” GPS executive secretary Jorge Tapia said during a webinar on permitting bureaucracy held by the local chapter of the American Chamber of Commerce (Amcham).

Tapia said on average there are 128 steps involved in approving a project, and many cannot be carried out simultaneously, something GPS, an economy ministry agency, wants to change.

One extreme example are permits from the national monuments council, which on average take 36 months.

Other obstacles include the initial costs of starting businesses and different criteria of evaluation services.

Hugo Hurtado, tax and legal partner at Deloitte, told the webinar there are 50 government agencies involved in evaluating projects, and that one might reject a project for the same reasons it was approved by another.

The CEO of electricity generation firm AME, Clara Bowman, said that speeding up permitting could turn Chile into a renewable energy exporter, as well as open the floodgates for the country’s energy transition.

She also warned that slow permitting imperils investor solvency, as companies are already spending money before starting works. “In the worst of cases one loses liquidity, which is what happened in Mexico,” she said.

In the specific case of renewable energies, another risk stemming from slow approvals is higher rates, which would negatively affect the sector’s competitiveness, Bowman said.