New ministry would manage resources of up to S/108,000 million

The Executive Branch will submit to the Congress of the Republic a bill to create its twentieth ministry, aimed at planning, coordinating, formulating, executing and supervising infrastructure at the national level in order to serve the population with public services.

To achieve this goal, the new “Ministry of Infrastructure” will absorb entities such as the National Infrastructure Authority (ANIN), the Agency for Investment Studies and Projects (OEDI) and programs attached to the ministries involved in infrastructure, along with Proinversión, Foncodes, Provías and Legado, among others. There will be 17 in total.

“In addition, [brindará] better control of processes, greater transparency and, in general, efficiency in their fulfillment, always for the benefit of the citizen, to whom we owe ourselves,” said Dina Boluarte during her message to the nation.

The sectors that invest in infrastructure in Peru occupy 30% of the 2024 Public Budget, including operation and maintenance. This would be S/108,163 million of potential resources to be managed, close to S/28,000 million from the central government, according to official data from the Consulta Amigable portal of the Ministry of Economy and Finance.

For the former Minister of Transport and Communications, Paola Lazarte, the creation of the new ministry – whose purpose she considers necessary – should not be part of an initiative that has not been discussed and is not part of a State reform.

“It is not about merging, but rather modifying the management of infrastructure, which involves financing projects and ensuring their continuity, as well as public contracts with an efficient model,” he says.

He explains that in the 1990s there was a structural reform at the fiscal and macroeconomic level together with organisations such as the IMF, something that, apparently, has not happened on this occasion. Precisely, several functions of the Ministry of Economy and Finance (MEF) would be absorbed.

“Any infrastructure reform is also fiscal. The MEF is in charge of the Framework Law for the Promotion of Private Investment through PPP and the Public Investment Law. It is not clear what the absorption proposal is,” Lazarte anticipates.

For his part, former Housing Minister Milton von Hesse says that the creation of this ‘mega-ministry’ will affect several ministries – starting with the MEF – and would “render meaningless” its counterparts in Transport and Communications (MTC) and Housing, Construction and Sanitation (MVCS) “if it takes away all the public works programs.”

“The Government is not clear that the problem of public investment cannot be solved with more ministries. The first attempt was ANIN, which did not carry out any work and only paid appraisals that Reconstruction with Changes did not previously provide,” he warned.

This is not the only announcement on the matter, as Boluarte has announced a “Peru-China Joint Commission” to facilitate a portfolio of Government to Government (G2G) projects with that country, aimed at providing “productive infrastructure and social services” locally.

G2Gs stand out because they require large investments. The Carretera Central, for example, was awarded to France in a competition led by Proinversión, which is now in the process of disappearing.

It lends itself to clientelist use

By Luis Miguel Castilla, former Minister of Economy

It is the merger of 17 ministries that includes the main executors of transport, health, education, irrigation, production, among others. A mega-ministry is being created and it is not clear what will be the responsibility of the sectoral ministries and what the MEF, the governing body of public investment, will be like.

It is a way out without much reflection regarding the country’s management problems, which do not necessarily require the creation of more institutions. This type of reform should be presented as part of a government plan at the beginning of a mandate, and not when they are leaving. It lends itself to clientelist use.