March 30, 2021
Documento CONPES 4028

The current policy guidelines do not consider the progress and experience acquired by the infrastructure sector within the framework of the Public Private Partnership (PPP) regime, nor do they include the characteristics of the fluvial system.

Therefore, the Conpes Document 4028 defines the State's contractual risk policy guidelines for projects to be developed under PPP schemes and other schemes involving private participation and whose purpose is the provision of infrastructure, the provision of river transport services and navigable channels in the country, in order to guide both State entities in the risks they may assume in this type of projects, and private investors in those risks related to the profitability of the economic activity.

Therefore, and taking into consideration the good practices applied in the structuring of infrastructure projects in waterways and navigable channels, the uncertainty regarding the acquisition of land, as well as the socio-economic compensations should be minimized according to the level and quality of the studies carried out during the structuring stage.

In any case, the management, purchase and cost overruns associated with the land acquired by the private investor and not subject to reversion to the public entity will be the exclusive responsibility of the private investor. 

Regarding the variation in costs derived from the relocation, intervention, protection and/or relocation of the networks, these will be shared with the public entity, as contractually defined.

The private investor will be in charge of the design risks, considering that it will be in charge of executing the studies and designs of the project and, therefore, has a greater capacity to manage and administer this risk.

It should be noted that there will be no coverage or compensation from the public entity as a consequence of the variation of any of the factors associated with the construction risks compared to what is actually executed.

It is also important to mention that the risk of quantities of cubic meters of dredging may be shared between the public entity and the private investor, according to the contractually defined limits, taking into account that dredging activities depend on the river's own and variable behavior and factors such as erosion, sedimentation levels, among others, which cannot be completely determined or controlled over time.

By its nature, the private investor is in the best position to manage and minimize this risk. Likewise, the private investor is in the best position to manage and reduce liquidity risks. Finally, all the effects of changes in the global economy should be covered by the private investor.

Finally, it is recommended that public entities verify the reference values on which the compensation of the risks shared between the private investor and the public entity is calculated, so that these values are in line with the reality of the project.

For more information contact our team