President Danilo Medina enacted Law 47-20 on Public-Private Partnerships, which will facilitate the development of infrastructure and services of social interest. This legislation regulates the initiation, selection, awarding, contracting, execution, monitoring, and termination of public-private partnerships, ensuring that these partnerships are the result of a competitive and transparent process and that risks are adequately distributed.

"The country needs to double the amount of infrastructure investment to approximately 5% of GDP each year. Public-private partnerships are a mechanism that allows for greater efficiency and effectiveness, provided they are carried out through good projects and with appropriate contracts that prioritize the interests of citizens," said Minister Gustavo Montalvo.

He also stated that in other countries this instrument is used for the development of roads, ports, airports, parking lots, and other infrastructure projects.

The Law, fruit of constant dialogue and public-private collaboration, establishes the procedures for public, private and non-profit initiative alliances.

"As an innovative element of this law, it includes non-profit PPPs, since NGOs can also provide services of social interest, provided they have a contractual framework that regulates their activities," Montalvo noted.

In this regard, any public-private partnership would require the submission of an initiative for evaluation by the National Council of Public-Private Partnerships, based on economic, social, and environmental criteria.

In the case of projects that are declared relevant and convenient, they would be put out to tender, including the qualification of bidders, technical evaluation, and economic evaluation. 

"This law establishes several mechanisms to increase the participation of potential national and international investors, so that the transparency of the process and competition among developers lead to the selection of the best private agent to execute the project," Montalvo clarified.

Similarly, Law 47-20 establishes that private initiative is limited to areas or sectors where the government has previously determined an interest in receiving bids, and projects that have been rejected in the previous two years cannot be submitted, in order to avoid administrative malpractice.

"The entire process would be carried out by the National Council created by this law, in which each member official has specific responsibilities and must issue reports on each project," Montalvo clarified.

This law also establishes that every project must involve a significant transfer of risk to the private sector, and states that once the contract is signed, the risk matrix cannot be modified in the event of a contract renegotiation.

In this regard, Montalvo clarified that "the Law stipulates that the risk matrix be established from the specifications and that it be a fundamental part of the contract, since the effective transfer of risks from the public to the private sector is one of the most important elements, as risks must be assigned to the party with the greatest capacity to manage and mitigate them."

Furthermore, the Law establishes a limit of 3% of GDP to the net present value of government commitments, in order to ensure medium- and long-term macrofiscal sustainability.