While some outsiders looking in are quick to criticise Latin America's slow uptake of P3 arrangements, experts with deeper experience of the region are more prone to praise the measured approach.
In a discussion earlier this year that veered onto the topic of progress in the Latin American infrastructure space, one advisor to the Colombian government defended the decision to slow the pace of procurements. That advisor said that with oil and gas prices being what they are, it wouldn't have been very smart for the Colombian government to go to market to find interesting actors to deliver their proposals.
And as Pablo Jaramillo told Infrastructure Investor in an interview earlier this year that dwelled upon governments and project sponsors in Colombia, Peru, Chile, Mexico and the fledgling P3 markets of Paraguay and Uruguay, “each country in Latin America has been trying to learn from the other ones, and that's created some interesting results”.
He was quick to praise the Colombian government for moving forward with 4G procurements at their own pace despite external pressures from eager investors, noting that this had allowed contracts to evolve into more bankable structures.
Paraguay provides a strong example of Latin American governments' emphasis on learning how to walk before running to market with an aspirational pipeline of ill-conceived and unbankable projects. After passing P3-enabling legislation in 2013, the Paraguayan government took its time with the procurement of its bi-oceanic corridor.
“The key thing they did there was they produced their template contract and they started the process for tendering, but they gave a six-month period for comments to be received on the contract,” said one advisor to both lenders and concessionaires in the region.
As the new year sets in, several advisors we spoke with said they expect markets will continue to build project bankability, and that pipelines will continue to grow in several markets across the region.
“It's going to be very interesting next year,” Jaramillo said. “I think most countries are going to continue filling the gaps they have, and definitely you're going to see Colombia and Peru as very hot markets.”