Regulatory Alert – September 2022

Important measures are issued in relation to the promotion of the private investment regime through public-private partnerships

On September 14, 2022, Supreme Decree Nº 211-2022-EF was published in the Official Gazette «El Peruano», through which, on the one hand, the Regulations of Legislative Decree Nº 1543, Legislative Decree that issues measures to improve project management and private investment promotion processes (hereinafter, the «Regulations of DL 1353»), and on the other hand, various amendments are introduced to the Regulations of Legislative Decree Nº 1362, Legislative Decree that regulates the Promotion of Private Investment through Public Private Partnerships and Projects in Assets, adopted by Supreme Decree Nº 240-2018-EF (hereinafter, the «PPP Regulations»).

In relation to the Regulations of DL 1543, through the same, the regulatory provisions for the application of this standard are issued, which aims to incorporate improvements applicable to the design, management and execution of projects developed within the framework of the National System for the Promotion of Private Investment, in order to guarantee the availability of public infrastructure and the effective provision of public services for the benefit of the population and users, under a sustainable development approach.

It must be noted that both DL 1543 and its Regulations are applicable to Public Private Partnership projects at the three levels of government.

The regulation regulates in detail the functions of the Specialized Bodies for the Management and Execution of Projects (hereinafter «OEGEP»), through which it seeks to execute projects in a sustainable and planned manner, ensuring the performance of the projects, in order to contribute to the closing of infrastructure gaps and access to public services.

In this sense, the Regulations of DL 1543 regulate, among others, the structure, tools, roles and functions of the OEGEP during all the execution phases of the PPP projects under their responsibility. At the same time, the rules for its implementation and proper functioning are also detailed.

Finally, it also regulates the criteria to be followed by the entities owning the projects in order to assign PPP projects to the OEGEP, whose total investment cost must be equal to or greater than 300,000 UIT.

On the other hand, Supreme Decree Nº 211-2022-EF also introduced several amendments to the PPP Regulation. In Particular, Articles 5, 9, 15, 18, 23, 27, 27, 29, 34, 34, 40, 41, 44, 45, 45, 47, 48, 49, 53, 55, 60, 60, 61, 79, 80, 103, 104, 130, 134, 138, 138, 143, 144 and 145 of the aforementioned regulation are amended.

Among the amendments, the following are the most important:

• The definition of budgetary capacity is modified, noting that now the budgetary viability is going to be subject to the provisions issued by the General Directorate of Public Budget of the MEF.
• New functions of the General Directorate of Private Investment Promotion Policy are included.
• It is established that the public entities in charge of managing a project or a portfolio of Public Private Partnership projects whose accumulated Total Investment Cost is equal or higher than three hundred thousand (300,000) UITs, must implement a Specialized Body for the Management and Execution of Projects.
• The definition of Public Private Partnerships is modified, expressly incorporating that «the investor may exploit the assets object of the PPP Agreement directly or through third parties for the exercise of any of the activities related to the referred contract, without greater limitations than those established in the respective contract, for the purpose of managing its risks, maintaining the responsibility for the compliance of its contractual obligations, before the public entity that owns the project».
• The regulation of the structuring and transaction phase of the Public Private Partnership projects is modified, implementing new specific rules for these.
• The content of the Evaluation Report is expanded.
• For contractual modifications, the information that shall be required as part of the evaluation of the project’s competitive conditions is established, so that these are not affected. Likewise, it also provides that the entity in charge is responsible for supporting the Value for Money from the State, and in case the entity assumes new commitments that require the use of public resources, it must support its budgetary capacity.

For further information, please contact Alejandro Manayalle (amanayalle@estudiorodrigo.com), Verónica Sattler (vsattler@estudiorodrigo.com) and/or Diana Briones (dbriones@estudiorodrigo.com)