Colombia sets infra goals in 2018-22 development plan

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Friday, February 8, 2019

In its newly unveiled 2018-22 national development plan, the Colombian government estimates that it will need 342tn pesos (US$110bn) in infrastructure investments in sectors such as transport, potable water, sewerage, energy and health, among others.

"It is necessary to identify and mobilize new sources of revenue that contribute additional resources to traditional sources (public budgets, tolls or fees) in order to facilitate these types of projects," the document presented by national planning department DNP states.

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The four-year plan also sets infrastructure goals for each sector in terms of built infrastructure, which are the following.

TRANSPORT

New roads built under the 4G concession program: 563km completed by 2022.

Primary roads rehabilitated under the 4G program: 1,779km completed by 2022.

Projects in the 4G concession program in the operation stage: eight by 2022.

In this area, the government has previously argued that many of the 4G contracts had financing problems, while some faced obstacles in terms of environmental assessment. For that reason the transport ministry set up a war room to support these concessions and managed to unblock the financial closure of the Ruta del Cacao concession last year.

However, authorities have also started to terminate the contract for the Santana-Mocoa-Neiva corridor, amidst significant delays and financing problems faced by its concessionaire, Aliadas para el Progreso.

The government adds that it is necessary to start thinking about the highway projects that will follow the 4G program, which will require new financing tools, as the DNP document notes that 50% of the financing for the current concessions comes from the national budget.

Some of the options proposed involve lower level administrations, such as city and departmental governments, who often finance infra projects through public transport fees.

The government suggests, among other options, imposing pollution taxes, urban toll fees and charging land owners that saw the value of their property increase as a result of infrastructure projects being carried out.

As regards the latter, the government stated that the transport ministry will present a framework for the use of these payments to finance transport infrastructure projects on a national scale.

Other transport goals for roads outside of the 4G highways program are:

New and improved secondary and tertiary roads: Increasing from 1,658km to 2,058km by 2022.

OTHER TRANSPORT

The plan includes the following objectives for infrastructure for other modes of transport:

River ports built or improved: Nine by 2022.

Airport concessions with modernization works: 12 by 2022.

Non-concession airports with improved infrastructure: 10 by 2022.

Rail infrastructure in commercial operation: Increasing from 420km to 1,077km by 2022.

As regards the rail sector in general, the DNP document establishes that, by 2020, the transport ministry will have to assign at least 5% of its annual budget to the development of rail infrastructure.

WATER

Colombia estimates that its will require 29.2tn pesos for potable water infrastructure until 2022, and 12.2tn pesos for wastewater infrastructure as well.

Some of the goals set by the DNP are:

New household connections: 10,000

People with access to potable water systems: Increasing from 44.2mn to 47.2mn.

People with access to sewerage and wastewater systems: 45.5mn

Treated wastewaters in urban zones: Increasing from 42.6% to 54.3% of the total.

However, the DNP warns that "the effectiveness of the investments and the quality of water and sanitation services is affected by intersectional discoordination and atomization of providers."

To solve this, the development plan will seek to reform the organizations in charge of developing departmental water plants. With this, the executor will have an organizational structure of its own and separate specialized teams for infrastructure, environment, risk management, social outreach and insurance.