Peru overhauls IPA to bring in investment

Q: How are you strengthening ProInversión?

A: The decree 1251 [approved in November 2016] establishes a new legal framework for public-private partnerships [PPPs] and for the functioning of ProInversión, opening a window for us to restructure the way we work internally.

In order to make processes nimbler, the executive director has got many of the decisional powers that used to belong to special committees made up by external members. The committees will still be engaging in the development of a project and tasked with issuing opinions and guaranteeing the quality of the processes.

For what concerns the development of our project pipeline, we have focused on the problems we had to improve the quality, efficiency and predictability of our processes.

Q: What have been the major problems you have addressed here?

A: We realised that we have to improve the capacity to contract good external consultants. We have lost the capacity to attract world-class consultants over the years. We haven’t updated our policies to contract consultants, and now we are working on a new set of rules for this with the support of the World Bank and we aim to have it ready by the end of 2017.

In the meantime, we have already started contracting quality consulting for urgent projects, as was the case with the Michiquillay copper project, where we launched a process to select a consultant, which Goldman Sachs won. [For] more than 15 years ProInversión didn’t work with a consultant of this level and it is helping us a lot with the project, with 10 major mining companies, including some of the global leaders in the sector, participating in the pre-qualification phase of the tender.

Q: What are you doing to speed up the tendering process of a project?

A: We are working to improve the readiness of the projects we are bringing to the market. It is key for us to have a plan ready with all the steps necessary to make a project happen. With the new rules we have to come up with a detailed agenda of the project and foresee any possible interference (expropriation, relocation, etc) so that when the project is executed it’s going to be clear how long it will take to fix these interferences. The new legal framework obliges us to be much more ready to improve the quality of what we do.

Q: Are there any specific improvements with regard to investment promotion?

A: We are working to combine our execution and promotion capacities. We are now in a position to go out to the market and bring to Peru more sophisticated investors than in the past and develop a pipeline that keeps them in the country. We have to put in place quality projects and good mechanisms to lure the best investors, which are also those who can get the best terms of financing.