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April 16, 2019Del Mazo reissues Peña’s PPS; seeks anticipated debt for 43 MMD
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Del Mazo reissues Peña's PPS; seeks anticipated debt for 43 MMD
The governor Alfredo Del Mazo seeks authorization from Local Council the delivery to the Private Initiative the construction and operation of two new prisons and rehabilitation of 82 roads, under a scheme of "provision of services" to pay up to 25 years. This would mean anticipated debt -in total- for 43 thousand 851 million pesos, which would be paid in annual rents.
Currently, the public debt of the State of Mexico already around 40 billion pesos.
In three initiatives sent to the Local Legislature, the president seeks to replicate a similar scheme to the Services Provision Projects or PPS, adopted as a model by his cousin, Enrique Peña as governor, but now under the name of "Public Partnership Projects ", which was designed, sent and approved in 2018 by the Legislature.
Notwithstanding the foregoing, none of the three initiatives precisely specifies the scheme that will be adapted to award the works, since the "second article" of each initiative indicates: "it will be hired through one of the mechanisms foreseen in said law” therefore, it may be through direct adjudication.
The initiative for the Ixtapaluca Prison (with capacity for 2 thousand inmates) indicates that the State would transfer to the private sector the risks and costs of the construction, as well as operation and maintenance for 3 thousand 900 million pesos. However, when awarding its operation for 25 years, with the cost of construction, at the end this would mean a total amount for the State of 15,111 million pesos, which would be paid in annuities, not counting the cost of VAT.
In the case of the Otumba penitentiary, it would also be for 2 thousand people, and it would mean contracting 25 years of advanced debt: 15,111 million pesos plus the Value Added Tax (VAT).
In the case of the highway project, to give maintenance and conservation for 12 years to 82 Tejupilco, Ixtapan de la Sal and Toluca roads, the value would be of 4 thousand 4411 million. However, in 12 years, it will increase to 13 thousand 629 million 176 thousand 506 pesos, plus VAT.
If the LX Local Legislature approves this scheme, people from the State of Mexico would be facing the third edition of the traditionally known as PPS (Service Delivery Projects), which means an anticipated contracting.
Translator: Martín Caballero
In three initiatives sent to the Local Legislature, the president seeks to replicate a similar scheme to the Services Provision Projects or PPS, adopted as a model by his cousin, Enrique Peña as governor, but now under the name of "Public Partnership Projects ", which was designed, sent and approved in 2018 by the Legislature.
Notwithstanding the foregoing, none of the three initiatives precisely specifies the scheme that will be adapted to award the works, since the "second article" of each initiative indicates: "it will be hired through one of the mechanisms foreseen in said law” therefore, it may be through direct adjudication.
The initiative for the Ixtapaluca Prison (with capacity for 2 thousand inmates) indicates that the State would transfer to the private sector the risks and costs of the construction, as well as operation and maintenance for 3 thousand 900 million pesos. However, when awarding its operation for 25 years, with the cost of construction, at the end this would mean a total amount for the State of 15,111 million pesos, which would be paid in annuities, not counting the cost of VAT.
In the case of the Otumba penitentiary, it would also be for 2 thousand people, and it would mean contracting 25 years of advanced debt: 15,111 million pesos plus the Value Added Tax (VAT).
In the case of the highway project, to give maintenance and conservation for 12 years to 82 Tejupilco, Ixtapan de la Sal and Toluca roads, the value would be of 4 thousand 4411 million. However, in 12 years, it will increase to 13 thousand 629 million 176 thousand 506 pesos, plus VAT.
If the LX Local Legislature approves this scheme, people from the State of Mexico would be facing the third edition of the traditionally known as PPS (Service Delivery Projects), which means an anticipated contracting.
Translator: Martín Caballero
By: Tere Montaño
