Paraguay outlines US$1.5bn PPP and turnkey agenda

Monday, January 28, 2019

Paraguay's public works ministry (MOPC) is planning to tender seven projects worth US$1.5bn between this year and 2021 using the turnkey and PPP models.

Three of the planned projects are PPPs worth US$370mn and the remaining four are turnkey contracts worth US$1.1bn, the head of the MOPC's strategic projects division, Jorge Vergara, was reported as saying by daily Última Hora.

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The first tender is expected for either July and August and would entail a US$150mn turnkey contract to widen a 20km section of the Ruta 12 highway and pave a 200km section of the same road between Chaco'i and Gral. Brugez (Presidente Hayes department).

In the second half of 2019, the MOPC is planning the tender of a US$80mn turnkey contract to pave a 65km section of the Ruta 6 highway in Alto Paraná department (Puerto Indio-Mbaracayú).

The first PPP project would be tendered in 2020. This would entail a private proposal from Chilean firm Somarco to install a ferry system on the Paraguay river that would operate between capital Asunción and other cities in the country's central metropolitan area, entailing a US$40mn investment.

Last August, a delegation of Chilean businessmen met public works minister Arnoldo Wiens to voice their interest in PPP projects in Paraguay, especially those in the road infrastructure sector, according to a press release from the ministry.

Another PPP tender planned for 2020 is a US$200mn contract to widen two sections of the Ruta 1 highway, entailing 100km in total.

As for turnkey tenders in 2020, the MOPC will auction the second and third stages of the Bioceanic corridor, which will be divided into two lots worth a total of US$800mn and will consist of works on 573km between Cruce Centinela (Chaco department) and the town of Pozo Hondo (Boquerón) near the border with Argentina.

Another turnkey tender scheduled for next year is the coastal road and river defenses for the city of Pilar (Ñeembucú), which is estimated to cost US$110mn. This project was declared a high priority by the MOPC back in September, according to the ministry's website, and would involve 15km of river defenses and a four-lane road alongside the Paraguay river, state news agency IP reported back in July 2017.

The last project, a US$130mn PPP, would be tendered in 2021 and entails widening a 65km section of the Ruta 6 road between Encarnación and Pirapó (Itapúa department).

Back in September, the head of the public contracts office, Pablo Seitz, called for simplification of the PPP law approved in 2015, saying that there are 15 institutions with some degree of competence in the tenders for such contracts, which he claimed caused mistakes such as the failed PPP tender for the expansion of Asunción airport, IP reported.

President Mario Abdo has not pushed for any changes to current regulations as yet, despite an earlier claim that his administration would review the framework.