According to Montt Groups’ branch in Uruguay, the environment in Uruguay is still favorable for infrastructure investors, despite recent headaches.
I believe the government will continue to support investor [in infrastructure]During a webinar on the benefits of Uruguay for investors, Perla Julin (CEO of Montt Group in Uruguay) told BNamericas that she was happy to answer questions.
She cited as positives the country’s regulatory structure, its geographical location, and logistics infrastructure, like the port of Montevideo.
The port of Montevideo is now the focus of an international arbitration case by port operator Montecon against Uruguayan state over an agreement that extended concessions of the specialized container terminal managed Belgian company Katoen Natie.
The government was able to avoid a US$1.5bn suit that the Belgian company was threatening to bring to the International Centre for Settlement of Investment Disputes. The company was also granted priority for container operations, which Montecon claims violates free competition regulations.
Julin stated that the dispute will have to be closely monitored, but that this doesn’t mean that the port’s development or companies that operate there will be affected.
Meanwhile, Montevideo rejected last week a proposal from both the finance ministry as well as the local administration that would have given access to a US$70mn loan by the Inter-American Development Bank. This loan would have been used for water and wastewater management investments.
Julin stated that investors still have many options to invest in waterworks financed through the departmental governments.
According to local Daily El Pas, the Montevideo administration is currently restructuring its entire development plan in response to last week’s failed vote. This will allow it to determine which projects will be paid for with its own resources.
CHINA FTA
Montt Group also highlights the advantages for investors in Uruguay by naming countries with which it has agreements to avoid double taxation. This includes the UK, Canada and Japan.
Uruguay is also seeking to sign a free-trade agreement with China.
Julin, when BNamericas asked her which sector of Uruguay would be most affected by such a deal, stated that agriculture would be the most affected.
We are still waiting for the official text to be available so we can analyze the deal. She added that once we have the text, we will be able to determine with greater certainty which sectors will be benefited.