In order to generate and promote private investment and to encourage the direct foreign investment in infrastructure projects and public services of collective interest, in a more efficient way, the Public Private Partnership Act was recently approved. This new regulatory framework aims to reduce red tape (trámites burocráticos) and create an environment of stability and legal security for those who are interested in contributing together with the Government, with economic resources and knowledge to the Salvadoran public sector.
Among other things, the Law establishes that all contracts greater than, or equal to, an amount of ten million dollars must be approved by the Congress of El Salvador. In addition, that same amount is established as the minimum investment required to be regulated by the Act. Smaller investments that do not represent debt or grant concessions, will not be approved by the Congress and will continue to be governed by the Public Administration Purchasing and Contracting Law (LACAP).
Essential public services like education, public safety, social security, penitentiary system, and water system, were excluded from the Law.
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