The Public Private Association in Nicaragua: the key for the future development
The Public Private Association, (from now on PPAs) is a renovator element in the growth of the Latin American economies. There are diverse factors that answer to the question: What is the key for the future development in Nicaragua? Nevertheless, within these key factors the PPAs may be considered.
The PPAs in Nicaragua hold a recent regulatory framework, being established the Law No. 935 and its Regulation, Decree 05-2017. In these normative bodies it is established as a principal objective to regulate and promote the association between the public and the private sector; establishing referent disposals for the formulation, engagement, financing, execution, operation and extinction of projects based in a Public Private Association.
It is important to stand out that the most expensive infrastructure, services and/or goods in the developing countries, is the one that doesn’t exist. For that, the developing economies have adopted models under the PPAs, in the sense of supplying that public necessity through the private complement. Having said that, the good practices of the PPAs have been reflected in particular cases like Honduras, in which Comisión para la Promoción de la Alianza Público Privada (COALIANZA) has outstand important investments in infrastructure and services as:
- USD 1,116 million of investment in the first adjudicated projects that wouldn’t be executed without the PPAs and,
- 110,000 jobs generated in the first initiatives of the PPAs.
In this sense, it can be determined that, having from now a regulatory framework established in the country, the PPAs in Nicaragua will play a crucial role. Through this figure, the state necessity will channel the private investment in works, goods and services; thus endowing the public sector with more efficiency and streamlining the economic activity of the private sector. Likewise, it should be clarified that the PPAs are not a privatization, but rather a complement of the involved parts in the development of the projects.
Therefore, we can conclude that Nicaragua is ready for the development of projects under the modality of Public Private Association; counting already with the legal framework and the clear laws for the optimal distribution of risks in such projects, all with a view of attempting more and better socioeconomic benefits in the country.
Denisse Gutiérrez Rayo
Associate
García & Bodán
Nicaragua