The Public Private Association and the relationship with development and investment
There is no right nor well accepted meaning of a Public Private Association, so we will take as reference the World Bank’s definition, that in general terms defines the PPA’s as: “an agreement between the public and private sectors in which some of the services or labor that are responsibility of the public sector is supplied by the private sector under a clear agreement with shared objectives for the provision of the public sector or the public infrastructure”.
With the previous definition, the present article’s purpose is to approach the PPAs from a future perspective for Nicaragua, making a minor tour about the formulas that have produce a great development in other countries and that should be applied in Nicaragua for a better sustainable development that allows us to grow more than the 4.3% that we grew in 2016.
The implementation of the Law No. 935, Public Private Association Law approved by the National Assembly the past October 5th, 2016, provides to Nicaragua one of the regulation frames for the PPAs, which has given countries like Mexico, Spain, Australia, Italy, Canada and Chile, even with their deficiencies, accurate or at least foreseeable rules for sectors of the private organizations like construction or financial entities, both at local and international level, in the development of projects like airports, hospitals, seaports, motorway, urban transportation or energy projects, that would never been possible without the cooperation between the public and the private sectors.
To assure a successful implementation of the law, we have to take the diligence in the following: i. guarantee that the execution of the law adjusts to the principles of competition, transparency and legal security that leads to a successful association, ii. In those political or social projects that would be mainly demanded by the population, but not necessarily would be self-sustaining or grantable, and that could damage the budgetary stability like the positivism that the private sector have in relation with the PPAs.
In conclusion, the implementation of the Law No. 935, Public Private Investment Association, will provide to Nicaragua a tangible tool that would allow to strengthen the national economy, which we will see in the following years with investment projects in infrastructure as well as in services, if and only if the projects are done with the needed diligence.
Luis Ramírez Aragón
García & Bodán