Acknowledging the lack of public investment funds and the need for better infrastructure to encourage the local business environment, the government of El Salvador has put its support behind PPPs. In June 2013, the legislative assembly passed the “Ley Especial de Asocio Público-Privados”, the special law on PPPs, which encourages joint ventures in areas traditionally considered public-sector domains. It provides a framework for PPPs, excluding the water sector. The law also requires potential PPPs to involve a minimum investment of US$10 million and secure the approval of the legislature before proceeding.
The PPP law also called for a new PPP unit within the Ministry of Finance but changes to the legislation have shifted this role to the export and investment promotion agency, “Agencia de Promoción de Exportaciones e Inversiones de El Salvador” (PROESA), which is currently in charge of developing and promoting PPPs.
In spite of a legal framework for PPPs, projects are taking off slowly. For example, the port of La Union, completed in 2008, is not yet operational after no bids were submitted to run the concession. In 2012 the construction of a large hydroelectric project (El Chaparral) was halted based on mutual agreement of the parties involved.
The Global Competitiveness Index (GCI) is published in the Global Competitiveness Report and assesses the competitiveness landscape of 140 economies. The GCI Infrastructure Score is a component of the overall index and covers transport, electricity and telephony infrastructure.
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La presente ley tiene como objeto establecer el marco normativo para el desarrollo de proyectos de Asocio Público Privado para la provisión de infraestructura y de servicios públicos y de interés general, de forma eficaz y eficiente. En un marco de seguridad jurídica, el sector privado aportará recursos económicos, habilidades y conocimientos necesarios para que, en conjunto con el Estado, desarrolle dichos proyectos en beneficio de la población.