(Corrects million to billion in first paragraph; adds full name and title of Luis Caputo paragraph five)
BUENOS AIRES, Nov 1 (Reuters) - Argentina hopes to attract $26.5 billion in infrastructure investments through 2022 in the form of public-public private partnerships (PPPs), government officials told a gathering of construction and finance executives on Wednesday.
The plan, enabled by a law passed last year that lowered barriers to foreign investment in public works, will include $5.2 billion in projects that will open to competitive bids in 2018, mostly in the transportation, communications and technology sectors.
Since taking office in December 2015, business-friendly President Mauricio Macri has ramped up investment in the country’s roads, railways and sewage systems after more than a decade of underinvestment during populist administrations.
But that has conflicted with the government’s aim to cut its gaping fiscal deficit to 2.2 percent of gross domestic product (GDP) in 2019 from 4.2 percent this year. PPPs would allow companies to finance the projects and enter in a long-term contract with the state to ultimately recoup their investments.
“The needs for infrastructure investment are enormous,” Finance Minister Luis Caputo told reporters on the sidelines of the event. “We need to achieve our deficit goals, which force us to be austere, but on the other hand we need to invest more in infrastructure so companies can be more competitive.”
Argentina’s treasury will invest 1.9 percent of GDP in infrastructure in 2018, in line with 2017 levels, according to the government’s budget. Caputo said the PPPs would allow total infrastructure investment to rise about 60 percent year-over-year, reaching around 3.5 percent of GDP.
Overall, the government expects to put 60 projects out to tender, ranging from a railway to link the Vaca Muerta shale field to coastal ports to construction of prisons, schools and hospitals. Last month, the Interior Ministry asked companies to submit proposals for building and financing $9.6 billion for water infrastructure projects.
The PPP program will kick off with bids this month to begin constructing 7,277 kilometers (4,521.72 miles) of roads. (Reporting by Luc Cohen; Editing by Sandra Maler and Dan Grebler)