Chile to tweak infra concessions to up environmental standards

Chile’s public works ministry (MOP) is working on “second generation” concession contracts with stricter environmental standards, though authorities also say they are pushing to streamline permitting processes that have been cited as bottlenecks for investments.

“We have a climate crisis, and we have to build resilient infrastructure,” acting public works minister Juan Andrés Herrera told BNamericas after his presentation at the InvestChile forum held in Santiago.

The new contracts will emphasize the need to consider climate change, the circular economy and community outreach while developing infrastructure concessions, the official said.

Though no new concession tenders have been launched since President Gabriel Boric took office in March, Herrera highlighted that the 2022-26 agenda offers plenty of opportunities for investors.

“There’s confidence, this is the moment to do it,” the acting minister said about the US$13bn plan.

At the same event, economy minister Nicolás Grau said that Chile is aiming to prove that higher environmental standards are compatible with boosting investment and economic growth. 

“We can accelerate permitting, and our current focus is sectorial permits that come after environmental evaluation, and we have a commitment to have a one-stop shop that will also involve institutions to make sure that legal deadlines are followed,” he said during a press conference. 

Meanwhile, finance minister Mario Marcel admitted that evaluation times have become longer and that the government is working to strengthen the institutions in charge of granting permits, such as environmental evaluation agency SEA.

“We can’t expect investors to have infinite patience,” he said in response to a question from BNamericas.

When asked about how inflation has hit the construction sector, Marcel said the government has been working since March to support firms.

“This effort has been worth it,” he said, saying that overall inflation has shown signs of stabilization in recent weeks.

MOP announced last month that it would readjust the budgets of public works contracts to account for recent inflation spikes. It is estimated that this will cover around 1,400 contracts and demand nearly US$400mn.