'Without a doubt, the great challenge for infrastructure is the social component'

Colombia, which will hold presidential elections in 2026, has a broad portfolio of infrastructure projects but under the current administration of Gustavo Petro, who took office in August 2022, only a handful have been awarded and even fewer have advanced.

BNamericas speaks with former deputy infrastructure minister Olga Lucía Ramírez about the current state of the sector and what lies ahead.

BNamericas: What are the main developments in Colombia regarding infrastructure?

Ramírez: We've experienced a slowdown in the last three years. However, it's worth noting that having functioning entities like the national infrastructure agency [ANI] and some continuity in projects has allowed for some progress.

It's very important for the country that the government has awarded two of the projects that were being structured: the Canal del Dique and Cartagena airport, as well as the La Dorada-Chiriguaná railway, a freight corridor connecting the center of the country with the Caribbean coast.

It's also worth noting that construction of the Bogotá metro is moving forward, and plans are already underway to expand both lines 1 and 2.

BNamericas: Petro's administration initially announced a significant agenda of social infrastructure projects. Has there been any progress?

Ramírez: There is interest in working on these types of projects, for example, in wastewater treatment plants, schools and education.

The rules are clearer so that this type of infrastructure can be realized through public-private partnerships.

For example, in Medellín, work is currently underway to finance the first prison to be built through a PPP. While it's a regional project, it's an important one that's currently in financial closure. The works will be carried out by Prodemex.

ANI also plans to open the bidding process for the wastewater treatment plant for the city of Cúcuta, in Norte de Santander.

In terms of transportation, there has been significant investment in tertiary roads.

Colombia has more than 142,000km of tertiary road network, and investments in these roads have been made through road authority Invías as part of an effort that began under the previous government to support the regions.

BNamericas: Have there been government decisions and messages that have affected investor confidence?

Ramírez: I would like to emphasize that Colombia has a fairly stable regulatory framework in its PPP law, which has been in place for more than 10 years and has been one of the pillars of investor interest.

However, there have been blunders or signs that have shaken investor confidence, such as the government decree that froze tolls, although this measure has been toned down.

ANI has met with private sector companies to discuss how to implement increases more gradually, so that the impact is not as severe, and so that confidence is maintained and contracts are respected, but the signs are definitely not positive.

The government also issued a decree postponing future budget periods, which created uncertainty, although the decree stated that this will happen if the parties reach an agreement on projects that are delayed and are not the fault of the concessionaire, but rather depend on the process for obtaining the environmental license, or when there has been noncompliance by the private sector, but this requires a prior procedure.

This series of messages affects confidence.

BNamericas: Toll collection is vital for highway projects, but it seems increasingly difficult to sustain that model in Colombia.

Ramírez: Indeed, the main source of revenue for highway projects is tolls.

Due to various social and economic factors, the population and transporters, in the current situation, are unwilling to pay the 10%, 15% and 20% increases originally planned for some projects.

It's important to note that agreements have been signed between ANI and the concessionaires to ensure the nation's commitment continues to be met, and the collection differentials have been paid.

The current social situation has not allowed for the increases to be implemented as planned in the contracts. At this time, it's not feasible to file a project, a private initiative, that proposes the installation of a new toll, precisely because of this social situation.

Without a doubt, the great challenge for infrastructure is the social component.

BNamericas: Is the issue of financial sustainability on the table now because of the toll issues?

Ramírez: Although confidence in institutions and contracts remains, the issue of financial sustainability has been raised, so it's unclear, for example, whether lenders' sources of payment will be affected.

These issues lead us to think that we need to start looking at how we'll continue to finance infrastructure projects.

It seems that the debate is now beginning to unravel – which is better, a concession or a public project? And the answer is, it depends, because there will be projects that, due to their investment effort, require a private partner to assume the risks and secure financing in exchange for compensation. There will also be projects that can be carried out through public works.

The reality in Colombia is that the fiscal situation is complicated, there are increasing budget cuts, and we need investment, especially in infrastructure, but we're seeing that this investment, rather than growing, is declining.

There are a number of messages that undermine investor confidence, so all of us who work in infrastructure must make it clear to them that the PPP concession model works, and that tolls are necessary, regardless of ideologies.

If Colombia has better roads, it's better for everyone.

BNamericas: How can opposition to tolls be reduced?

Ramírez: This is where the topic of community engagement comes in.

There will always be lessons learned. If there's one lesson learned from the first generation of concessionaires, it's that we need to sit down with people, share the project and explain the benefits so they become allies in the process and avoid contractual conflicts.

When tolls cannot be set or increased in accordance with contracts, compensation issues arise, and even early contract terminations may occur, which are not scenarios we want for projects.

Therefore, it's key to continue or strengthen work with communities to ensure the social sustainability of projects and avoid creating uncertainty for lenders and private investors.

We need to sit down with the region, with the authorities, with the community.

From an environmental perspective, mitigation measures for potential impacts must also be clearly defined, and permitting times must be improved.

There are projects like Accesos Norte 2, which haven't been able to get off the ground as they should have due to issues with the environmental authorities. The Canal del Dique had its own environmental instrument for the river, but the environment ministry [in March 2024] said an environmental license was needed, which means extending the preconstruction stage. Puerto Antioquia also faces environmental issues, as does Muelle 13.

The examples show the challenges that projects must face from an environmental perspective.

Additionally, there is another important issue: permitting. We see that regional environmental authorities are not issuing the necessary permits, and this also requires work from a social perspective.

BNamericas: Petro's administration ends in August. Could infrastructure projects be put on hold until a new government takes office?

Ramírez: Colombia has an intermodal transportation master plan, meaning we have a roadmap. We know what projects are underway, what impact they've had, what projects should come next, and what we can do to develop new financing schemes.

However, during election time, the issue of infrastructure tends to become politicized. There is a tendency to prioritize some projects over others, or to slow down some projects over others.

BNamericas: What can we expect in terms of infrastructure in 2026, given that the current administration ends in August of that year?

Ramírez: All the candidates I know want to invest, they want to find ways to open up fiscal space for all sectors, and they understand that infrastructure mobilizes and connects with many other sectors.

Most candidates know what projects are budgeted. The roadmap is in place. We know what Colombia needs in terms of ports, rivers, roads, airports, etc. That shouldn't change, and we must continue with what we plan, regardless of who is leading the government.

Considering the time required for each project, from structuring to the start of construction, it's important to attract more investment based on the needs and projects already identified.