International Construction Law Review
PUBLIC-PRIVATE PARTNERSHIPS LAW IN COLOMBIA: PRINCIPLES AND RISK ALLOCATION SCHEMES
JUAN CARLOS QUINONES *
ABSTRACT
For public-private partnerships in Colombia, Law 1508 of 2012 determines that the core consideration when contracting is the provision of services. The allocation of risks must therefore be determined according to this consideration. In other words, “the party who is best able to guarantee the continuous provision of the service, under circumstances in which a particular risk occurs, is the party who should bear that risk”.
I. INTRODUCTION
Today Colombia’s economy is the fifth-largest in Latin America. The drivers of this growth include, inter alia, a wide variety of natural resources, improvement of access to credit, enhancement of national security and the diversification of markets.1 In addition, Colombia has signed free trade agreements with several countries, including Canada, Switzerland, the United States of America, Chile and South Korea, and further trade agreements are currently being negotiated with the European Union and the People’s Republic of China.2 As a consequence of this dynamism, the Colombian Government has determined that the improvement of economic and social infrastructure is one of the key factors for developing the national economy and fulfilling the economic obligations undertaken in the bilateral free trade agreements.3
In this context, the Colombian Parliament enacted Law 1508 of 2012 which regulates public-private partnerships (PPPs). The main aim of the law
* The author is a Colombian lawyer and graduate of the Universidad Santo Tomas, with postgraduate degrees in administrative law, commercial law and construction law from the Universidad Javeriana and the University of Melbourne. He has been working for more than six years as a legal adviser to public and private entities involved in major economic infrastructure projects in Colombia and Latin America. This paper is based on “Implementation of Public Private Partnerships in Colombia by Means of Private Financing Models and Risk Allocation Schemes”, written by the author for a Master’s degree in Construction Law at the University of Melbourne.
1 Country Partnership Strategy Progress Report for the Republic of Colombia for the Period FY08–FY 010 (International Bank for Reconstruction and Development and International Finance Corporation, 1 March 2010).
2 Proexport Colombia, Tourism, Foreign Investment and Exports Promotion: http:/ /www.proexport.com.co
3 ABC de las Asociaciones P úblico Privadas (Departamento Nacional de Planeación) [ABC of Public Private Partnerships, National Planning Department] [author’s trans.] (2012).
The International Construction Law Review [2013
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