On April 23, 2023, Legislative Decree Nº 1550 (the “Decree”) was published in the Official Gazette “El Peruano”, whereby the Executive Power amends Legislative Decree No. 1362, which regulates the promotion of Private Investment through Public Private Partnerships and Projects in Assets (the “PPP Law”).
The purpose of the Decree is to amend the current PPP Law, in order to implement improvements in the budget capacity evaluation processes, taking into consideration the level of information available in each of the phases of the PPP projects.
The main modifications included are the following:
The Decree modifies Article 4.5 of the PPP Law, determining that in order to assume the firm and contingent financial commitments derived directly or indirectly from the execution of the contracts entered into under this law, “the declaration of use of public resources or the budgetary capacity of the State”, as the case may be, will be considered; without compromising in the short, medium or long term, the budgetary balance of the public entities, the sustainability of public finances, or the regular provision of public services.
In this way, not only the budgetary capacity of the State will be considered, as stated in the current regulation, but also the declaration of the use of public resources.
The Decree amends Article 36 of the PPP Law, stating that the public entity in charge of the project will be responsible for including the declaration of the use of public resources in the Multiannual Public-Private Partnership Investment Report.
Finally, the Decree modifies Article 37 of the PPP Law, indicating that the public entity in charge of the project will also be responsible for including in the Evaluation Report the declaration of the use of public resources.
In addition, the Decree incorporates Article 24.A, referring to the declaration of use of public resources, which contains a projection of the expenses required for the financing of the PPP project, resulting from the evaluation of the budgetary capacity made by the public entity that owns the project, considering a 10-year horizon, in accordance with the regulations in force of the National Public Budget System.
Finally, it is important to note that this Decree will enter into force on the day following the publication of the Supreme Decree that will amend the Regulations of the PPP Law, approved by Supreme Decree No. 240-2018-EF.
For further information, please contact Veronica Sattler (vsattler@estudiorodrigo.com), Alejandro Manayalle (amanayalle@estudiorodrigo.com) and/or Diana Briones (Dbriones@estudiorodrigo.com).
