BUSINESS

Business Opportunities

In Ecuador in recent years, Public Investment has been the driving force of the economy. This statement is not only evidenced in figures, but also in tangible works. That is why the figures and statistics of the Public Procurement constitute a very important evaluating aspect of the development and progress of our country (but not the only or the most important one). However, private investment, especially foreign investment, clearly was not present to the desired extent (in comparison to public investment and especially to private foreign investment that our neighboring countries received). The current economic situation has forced the authorities to take a turn in relation to the investment policy necessary to maintain the same level of execution of works in the country. Now, it is the private sector that must take advantage of the opportunity and openness that the government is offering and transform itself into what it should always have been: the true engine of the national economy.

The situation changed: It is time for private investment

There are the tools to do it:

By means of Executive Decree 582, the Government has made possible the construction of works and projects in strategic sectors with investments and participation of the private sector. It is through the Regulation of the Public-Private Partnership System contained in said Decree, that the rules are established for a "private promoter" to generate projects in strategic sectors and public services, which will be approved by the "public promoter". With the issuance of this Decree, private companies will be able to invest in the areas of strategic sectors, provision of public services of electricity, roads, port, airport and rail infrastructures, both in new projects and in those already in execution.

The regulation is based on Article 100 of the Organic Code of Production and it must be taken into account that the decree determines that this must go to a Bidding process. The regulation contemplates 18 requirements that private proponents must meet to participate in public sector projects, whether new or already in execution. Once the private initiative is considered of public interest, the governmental entities or public companies have a period of 180 days to carry out the complementary studies and the necessary validations.

Another tool is contained in Article 27 of the Regulation of the Public Procurement Law, which provides for the possibility of submitting proposals for financing granted by the bidders themselves or by investors, state organizations, or financial or credit institutions and institutions, to cover the entire project or to complement a part of it. In this case, the financing offered will be one of the aspects to be evaluated and qualified within the determination of the best cost foreseen in the Law.

In the Constitution of the current Republic it is expected that the State will establish public companies for the management of strategic sectors, the provision of public services, the sustainable use of natural resources or public goods and the development of other economic activities. But in the following article it is clarified that "The State may delegate participation in strategic sectors and public services to joint ventures in which it has a majority shareholding. The delegation will be subject to the national interest and respect the deadlines and limits set by law for each strategic sector. "And more importantly:" The State may, exceptionally, delegate to the private initiative and the popular and solidarity economy, the exercise of these activities, in the cases established by law. "

The Organic Law of Public Enterprises contemplates the associative capacity, in function of which the public companies, for the fulfillment of their aims and business objectives, can constitute any type of association, strategic alliances, mixed economy companies with public or private sectors in the national or international scope or of the sector of the popular and solidary economy. It is important to highlight that the selection of private participation in this type of associations must be carried out through public tender, with the exception of partnerships with public companies of the international community or its subsidiaries.

Are not these real opportunities for the private sector to take the baton in relation to investment in Public Procurement and in general to the driver's seat in the vehicle of the national economy? It is only necessary that public officials know and use these legal figures in force, and that from employers, including foreign companies, there is interest and collaboration, who obviously to look after their business and investments should seek the necessary legal advice to participate in these Projects. The door is open!

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