After more than a little hesitation, Colombia is pressing hard to implement multibillion dollar plans that aim to change the face of transport infrastructure and boost competitiveness.
The timing is perfect. The Colombian economy has performed strongly during the last decade in terms of growth and poverty reduction, helped by the boom in oil and mining, and all within the context of a sound monetary, fiscal and financial framework.
Forecasts remain bullish on Colombia, with growth rates around 4% expected through the remainder of this decade, despite less favorable external conditions.
However, as noted by a recent OECD analysis, productivity and investment outside the oil and mining sectors remain low, due among other factors to inadequate infrastructure that hurts competitiveness in a country that now has the fourth largest economy in Latin America.
According to private sector estimates, transport infrastructure alone requires investment of around 3.55% of GDP, with the main needs being in road and rail networks.
To sustain future growth, the Fourth Generation of Road Concessions (better known as 4G) are considered key, and will require about 50 trillion pesos (some US$17 billion) in the next six years, as are improved planning and implementation of infrastructure projects.
For example, companies building and operating highways want environmental permitting to be speeded up, as at present the process can take more than two years. The authorities recognize these demands and have introduced some necessary reforms. However, major challenges remain.