For more than two decades, most Latin American countries have been implementing projects in the public infrastructure sector with the participation of the private sector.

The main scheme used has been the granting of the right to exploit a public asset as a concession by a government entity. In this way, the private sector builds, operates and subsequently transfers the asset to the government, granting it the right to be remunerated mainly with fees charged directly to users.

However, in recent years, public-private partnership (PPP) schemes have evolved, the main characteristic of which is that the focus is on the services derived from public assets and that the remuneration of the private investor is primarily through deferred payments in the time provided by the government. Consequently, new (or updated) legal frameworks have been created, and guidelines, methodologies for comparison and evaluation of the contracting modality have been designed, which have been complemented with traditional methodologies for social evaluation of projects.

For example, in 2007 the Ministry of Economy and Finance of Peru developed the “Manual for the use of the methodology for the valuation of contingent liabilities of the State derived from the signing of contracts in the Public Private Partnership (PPP) modality” . In 2008, it published the Framework Law on Public-Private Associations and designed a methodology called the Public-Private Comparator aimed at evaluating projects that require co-financing from the government. In November 2012, the government modified the regulations of the Framework Law, incorporating details of the previous methodology applicable to co-financed projects in the process of incorporating private investment.

For its part, in the month of January 2012, Mexico enacted the Law of Public-Private Associations (PPP Law), the regulations, guidelines and a manual that establishes the provisions to determine social profitability as well as the convenience of carrying out a project through Public-Private Partnership schemes.

Also in January 2012, in Colombia, a Public Private Associations Law was published and, in parallel, the government, through the Ministry of Finance and Public Credit (MHCP) and the National Planning Directorate (DNP) published the methodology of the Public-Private Comparator and Eligibility Analysis in a document called “Good Practice Guide for the execution of Public-Private Partnership projects”. In turn, the General Directorate of Public Credit and National Treasury – Subdirectorate of Risks of the MHCP published the Methodology of Assessment and Monitoring of Risks in State Contracts, which includes the process of identification and quantification of risks, and the valuation of liabilities contingents, which are regulated through a Contingency Fund. The MHCP also published in December 2012 the document “Contingent Obligations: Methodologies of the Colombian Case”. Currently, the DNP is developing a Multicriteria Analysis Methodology, using the Hierarchical Analytical Process (PJA) for the selection of the execution modality in its final analysis stage.

In August 2011 in Uruguay, the Public Private Participation Law was published to carry out infrastructure works and provision of related services. In a complementary manner, the National Development Corporation of Uruguay in coordination with the Ministry of Economy and Finance developed the “Methodological Guide for the Public-Private Comparator for Public-Private Participation schemes in Uruguay” and additionally recommends the use of an analysis of the eligibility index to evaluate projects in early stages.

In Chile, as of 2007, the Ministry of Finance has a conceptual and applied framework of contingent liabilities for different guarantees that the public sector grants and that have been in operation since that year, including concessions of public works (whose Law was modified in 2010 with emphasis on the regulation of services and dispute resolution mechanisms). Every year, at the time of the budget discussion, a “Contingent Liabilities Report” is presented to the National Congress. Likewise, at the initiative of the Coordination of Concessions of the Ministry of Public Works, applications of the public-private comparison methodology have been developed for the sectors of hydraulic works, public buildings and hospitals, although to date there is no general methodology to use in all sectors. In 2014, the government through the Ministry of Social Development (Ex MIDEPLAN) convened a study to develop a convenience analysis, which included the analysis of the eligibility index, the public-private comparator and the multi-criteria analysis.

In Guatemala, applications for social evaluation, eligibility analysis and public-private comparator have been developed for a PPP contract of an administrative center. In El Salvador a value for money analysis for the international airport, and recently an eligibility and value for money analysis for a wind farm.

Finally, Paraguay is currently developing methodologies for social evaluation of projects for selected sectors and a comprehensive cost-benefit methodology to evaluate PPP projects.