Newsletter
Corporate & Business
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Public-Private Associations Law Jan 2012

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New Public-Private

Partnerships Law.

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Public Private Partnerships (PPPs) are forms of long-term investment between privates and government, these projects consist in the provision of services to the public or final user, which need infrastructure provided wholly or partly by the private sector, the goal is to increase social welfare and investment levels in the country.

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On Monday, January 16, Mexican Congress enacted the Public-Private Partnerships Act, which aims to regulate the schemes for the development of such projects, amending, supplementing or repealing certain provisions of the Public Works Act, Procurement Act Leases Public Sector Services, Expropriation Law, General Law of National Assets and the Federal Code of Civil Procedure.

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Some of the objectives intended with the approval of this law is to achieve greater economic development and increase the investment in infrastructure, which will result in stimulating the country's domestic market and a major creation of jobs.

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PPPs allow the government to avoid or defer infrastructure spending without giving up their benefits and offer the possibility of achieving greater efficiency in the construction of infrastructure assets and the provision of related services by reducing the costs of the State when providing such services. Therefore, this new law means savings in public finances and releases the restrictions that prevented the mixing of public and private resources.

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It seeks to contribute to the Private Sector in Mexico to invest the resources inside the country, instead of investing abroad. That way they will trigger the growth of the economy and generate jobs.

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In order to start a project, the Secretariat of Public Function will include in their electronic government information system (CompraNet) information related to projects of public-private and unsolicited projects received by Federal Public Administration entities. This system will provide free consultations and will be the way of developing hiring procedures.

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The agencies and entities who intend to develop a public-private partnership project, will convened to contest, where the projects will seek to have the best conditions of price, quality, financing and timing. The entities of the Federal Public Administration will give priority to projects to be developed through schemes of public-private partnerships, in compliance with the requirements of the provisions of environmental protection, human settlements, urban development, construction, use of ground and others that may apply at the federal level.

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The Public-Private Partnerships Act will encourage the attraction of new technologies and will lead to better quality projects and the accelerated progress in building infrastructure, while promoting competition and competitiveness among private consortiums.

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In addition, the Mexican Finance Ministry is required to develop a digital database and to publish a list of projects in development, the amounts disbursed and outstanding incurred, the executive project and the progress of the work, as a way of ensuring the transparent use of resources.

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One of the main benefits is to provide security and certainty to private actors and companies that intend to participate in complex infrastructure projects that require very long periods of development.

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For additional information, you may contact any of the members of our Corporate & Business Practice Team.