Finally, the contract awarded in 2020 for the construction of a photovoltaic power plant in El Arom was signed with Solarpack. The Spanish company will invest 145 million dollars. It is the first state contract under the form of a public-private partnership (PPP). Two more are coming, also awarded in December 2020, with a total investment of 244 million dollars: III. phase of the Villonaco wind farm project (Loja) and the Conolophus photovoltaic project (Galápagos).

There is a national clamor for more public works, but that is not possible given the over-indebtedness. The solution is private investment in public works, which is achieved through PPP with the double benefit of starting the economy, rather than borrowing from the state.

Public works depended on loans from foreign governments to Ecuador, so that companies from their country could carry out work in Ecuador. The result is closed tenders that result in higher prices than with an open tender, and bribes are also paid in addition. The government still pays even if the job doesn’t live up to expectations. This is the experience with correato hydroelectric plants.

With the PPP contract, these risks are minimized. In the case of El Aroma, there were several offers, and Solarpack offered the lowest price for the energy it sells to the state. If your production costs are rising or the amount of energy produced is less than expected, that’s the contractor’s problem. The state will only pay Solarpack for the delivered energy and at the agreed price. As soon as the state obtains energy and sells it to consumers, it does not cost the state anything and does not incur debt.

The work will require labor in the south of Manabi and will be a source of electricity…

The construction of the factory in El Arom makes it possible to benefit from the investment of more than 2,000 million dollars that the state invested in cementing the dry forest. The works will require labor in the south of Manabí, and will be a source of electricity near Manta, which will be able to cover 60% of its consumption. That’s the kind of work that’s in demand.

These APPs are made under the protection of correato law. The former president is the one who had the wisdom to propose this form of contracting. But when the current government presented to the Parliament a reform of the law to make it more operational, UNES was tasked with denying it.

The authorities have taken time to improve the legal environment through secondary regulatory reforms and have received assistance from the governments of Canada and Korea to structure the projects. But the Government is paying a very high price for the search for the perfect mechanism: the construction of the first job under the PPP umbrella would begin only halfway through its mandate.

By 2023, tenders for projects in the oil and power sector worth 6,000 million dollars are expected, including the repowering of the Esmeraldas refinery, an investment of 2,700 million dollars, for which a consortium of prestigious multinational companies has been registered. There are projects estimated at $12.8 billion that won’t go out to tender until 2024, including the Cardenillo hydroelectric plant and numerous road works, including a fifth bridge.

The authorities would squeeze the accelerator well so that the second half of the four-year period would be an investment boom and the picture would be reversed that the Government was not carrying out the works. (OR)