Peru aiming to invest US$33bn in infrastructure projects

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Wednesday, December 28, 2016

Peru's government, which has completed its first five months in office, has lined up a US$33bn portfolio of infrastructure investments, a senior government official said.

The government is working to eliminate bureaucratic obstacles to US$18bn in projects, while state investment promotion agency Proinversión is studying another US$15bn in project initiatives as part of President Pedro-Pablo Kuczynski's goal to modernize the Andean country's infrastructure, finance minister Alfredo Thorne said.

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"Of the US$18bn in projects that have been held up, about US$10bn have moved forward and we're fighting to free up another US$8bn," Thorne told reporters in Lima in broadcast comments.

Projects that have been freed from snags include the Autopista del Sur highway, the port of Pisco; and the Jorge Chávez and Chinchero airports, Thorne said. A contract addenda will soon be signed with Jorge Chávez operator Lima Airport Partners to start work on a second runway, Thorne said.

Proinversión is being reformed to become a decentralized agency, which will work on co-financed projects including the tax swap system known as obras por impuestos, Thorne said. The agency will also provide local governments with training in project management, he added.

The government will propose legislation aimed at enabling regional governments to work with bi-annual budgets so that unused funds can be transferred to the following year and not returned to the central government, he said. Regions such as Cajamarca executed as little as 25% of their annual budget last year.

President Kuczynski, who took office July 28, is working to fast-track billions in infrastructure investment, including road, rail, port and airport projects. In late November congress approved a 2017 transport infrastructure budget of 10.744bn soles (US$3.2bn).

Kuczynski has pledged to pave Peru's entire 27,000km highway network and extend potable and sewerage water services to 100% of the population over the next five years.