Colombia targets ‘large-scale’ social infra PPPs

In an exclusive interview, the country’s head of planning said the country wished to take a ‘big leap forward’ with projects in areas such as daycare centres and housing. He acknowledged that deals needed to be better structured than in the past.

Colombia is for the first time to target the social infrastructure space for public-private partnerships (PPPs), according to Hernando José Gómez, director of national planning in the Juan Manuel Santos-led government, whose Social Party of National Unity was voted into power last summer.

“Social infrastructure has always been owned by the government in the past,” he said in an interview with Infrastructure Investor while on a visit to the Colombian Embassy in London. “Now we want to take a big leap forward with large-scale public-private partnerships (PPPs).”

Gómez described daycare centres as a “priority” while adding that the government is also keen to expand the country’s university network. However, the first social infrastructure PPP likely to see the light of day in 2011 is for a judicial courthouse in the capital city of Bogota. Gómez said he envisaged the “experimental” project being launched sometime in the first quarter.   

Another major priority is social housing, where, according to Gómez, there is a deficit of two million units – half of which he wants to see built in the next four years with the help of the private sector. “There is a major issue in relation to land availability, but now an alliance has been forged with local mayors to release land and get it connected to utilities,” he said. 

Attracting the private sector is an essential aspect of Colombia’s infrastructure plans and Gómez believes the country has plenty to offer investors. He pointed to good financial and regulatory standards (“not one Colombian financial institution went bankrupt during the Crisis”), a well-functioning stock market and a reputation for business-friendliness (ranked 39th globally last year in a World Bank survey).

Against that, there have been disputes over existing contracts and accusations of corruption in the past.  Gómez acknowledged that there have been problems in structuring deals properly. “There is upside for the private sector in Colombia,” he said. “We just need better structures, and we are learning from what Chile has done. The Ruta del Sol [a road project which reached a $900 million financial close last year] was much better structured and the risk well assigned.”

*A more detailed version of the interview with Gómez may be viewed in the forthcoming February 2011 issue of Infrastructure Investor magazine.