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Public Private Partnership Projects

In Mexico there are different schemes to develop public-private partnership projects, which include:

Concessions

The private sector builds and operates the project. Generally, the investment is recovered through the fees paid by project´s users. This scheme is used mainly for roads, ports and airports.

Financed Public Works

The private developer invests in a project, and once it is constructed the public entity pays back the total investment. It is generally used in the electrical sector.

Joint Ventures

Particular risk-sharing schemes mainly for the hydrocarbon sector.

Public Private Partnerships (PPP Contracts)

Long-term contracts through which the private developer provides, partially or totally, infrastructure for the provision of public services. The public sector pays a monetary consideration to the developer for these services. This scheme is mainly used for hospitals, road maintenance, penitentiary centers and hydraulic infrastructure.

In 2012, the Federal Government enacted the Law on Public Private Partnerships (PPP Law), in order to regulate most of the projects implemented under this scheme.

This legal framework applies to projects that involve a long-term contractual relationship between public and private sector entities for the provision of public services to the public sector, intermediaries or the end user, utilizing infrastructure provided, partially or totally, by the private sector.

The PPP Law applies to:

Federal public agencies and entities.

Federal public trusts not considered State-owned entities.

Public entities regulated by federal laws, with autonomy derived from the Political Constitution of the United Mexican States.

Federal entities and municipalities that allocate federal resources to these type of projects.

The PPP Law and its complementary regulations are available in the following link:

For projects which are not regulated by the PPP Law, there is a specific legal framework for each infrastructure sector. These regulations can be found in the following links:

SCT

Ministry of Communications and Transportation

Legal system

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SENER / CFE

Ministry of Energy/ Federal Electricity Commission

Legal system

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ISSSTE

Institute of Security and Social Services for State Workers

Legal system

Go to website

IMSS

Mexican Social Security Institute

Legal system

Go to website
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