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INCENTIVES FOR PUBLIC PARTNERSHIPS – AND PRIVATE FOREIGN INVESTMENT

By Decree No. 1040 was issued the ‘Implementing Regulations of the Law on Incentives for Public-Private Partnerships and Foreign Investment’, this document adequate distribution of risks, a clear outline of obligations and limits contemplated reasonable incentives are some of the established elements.

The private manager should be clearly identified

According to the regulations it is called ‘private operator’ to a private entity, incorporated under Ecuadorian legislation, which is responsible for the development of the project, ensure that the private manager is responsible for the different stages of the project but may be divided and awarded separately.
The capital of these managers may be private or provided by a state enterprise of a country from the international community. In addition, the entity must have a specific purpose, legal personality and be taxable to tax obligations.

Minimum essential elements of projects

Include adequate risk distribution, a clearly identified private manager, a scheme of bilateral long-term obligations, performance indicators, the form of consideration established private operator may be through fees paid by the recipients, deferred payments from the public sector, both combined or other established by law; and total or partial combination of the stages of planning, design, construction, financing, marketing, operation or maintenance.

IADC approve projects

The Interagency Committee APP, as an organ of the executive branch, will approve the projects. To establish a simplified process will issue resolution valuation parameters, terms and other aspects to consider.

On the other hand, the consideration for the private sector will be the payment of fees by the persons to services, deferred payments from the public sector or a combination of both. The State may also contribute to the projects with cash contributions, grants, loans, guarantees, deferred payments, tax breaks, among others.

A decree will contain parameters for resolving disputes

If there is a dispute between the parties, the PPP Act provides a period of 60 days for these to be resolved through direct dialogue or mediation.

2017-09-18T16:24:22+00:00 29/09/2016|Latest news|