Peru’s Executive Branch has modified the framework law for investment promotion through Public-Private Partnerships (PPP), outlining the accompaniment, follow-up and facilitation of projects, and conceding discretion to officials in decision-making.
The measure takes place under Congress-granted legislative powers, which entitled the Executive Branch to restructure the Private Investment Promotion Agency (ProInversion). This reorganization is aimed at consolidating the Agency’s role, enhancing its efficiency, quality and promptness of PPP projects under its responsibility.
Articles amended
As per the articles modified, ProInversion will be in charge of issuing technical-regulatory guidelines regarding PPPs and Projects on Assets’ assessment process in the formulation, structuring and transaction stages.
Policies and guidelines for private investment promotion and development through PPPs and Projects on Assets, as well as technical-regulatory guidelines approved by ProInversion, will be compulsory for National Private Investment Promotion System bodies involved in any of the aforementioned stages.
Accompaniment and facilitation
The modifications establish new roles for ProInversion in PPP ventures’ planning, programming, formulation and contract execution in order to guarantee project quality. The amendments are also aimed at extending ProInversion’s scope through decentralized offices, and strengthening its capacities and institutional character.
As a result, the accompaniment, follow-up, facilitation and simplification in the contract execution stage of said projects will fall under the competence of ProInversion.
Thus, the Agency will be in charge of providing technical assistance and support to local and regional governments in the various stages of PPP and Projects on Assets.
In this sense, the Directive Board determines which projects and/or stages will be subject to consultancy to ensure the management quality of the private investment process, to be assigned to a renowned specialized company hired by ProInversion.
Prior to the beginning of PPP projects’ promotion process, the Private Investment Promoter’s Assessment Report shall bear the approval of Peru’s Economy and Finance Ministry with no exceptions and under liability.
Contractual amendments
In the case of contractual amendments, it is provided that the Ministry, Regional or Local Government shall call the corresponding public bodies to state their opinion on the addendum proposed within ten business days from the receipt of the said request. The public bodies thus convene for the joint assessment process, to which the investor may also be summoned.
In this stage, the corresponding Private Investment Promoter may be requested to facilitate information about the project design and contract.
Regarding the awarding of projects, direct awarding is established for the proposer of a given private initiative if no other party expresses their interest in executing the given project after 90 calendar days from the date of publication of the Declaration of Intent.
Officials’ insurance and discretion
Actions and decisions made during a PPP’s formulation, structuring, transaction and contract execution stages, including contractual amendments regulated by Legislative Decree 1224, are, by their very nature, inherent in decision-making regarding the investment to be executed. Thus, they fall under the discretion of corresponding officials.
Likewise, Assessment Reports on projects under ProInversion’s responsibility shall be prepared by the said agency, having the prior approval of the project owner.
Within this framework, ProInversion shall obtain administrative, civil and criminal liability insurance for officials of bodies in charge of making decisions within the framework of investment projects regulated by Legislative Decree 1224.
Mapping of interference
ProInversion, prior approval of its Directive Board, may carry out the mapping and assess the legal status of priority properties and areas which may interfere with the development of PPP projects. The Agency may also assess the status of other administrative proceedings which prove vital for the development of a given project.
ProInversion restructuring
ProInversion is entitled to make the necessary reforms, changes or re-organizing measures to optimize its functions and resources for a period of 240 days.
(END) JJN/JJN/DHT/RMB
Published: 12/1/2016