Infrastructure - Venezuela - Future president faces huge infrastructure investment gap

By Jacopo Dettoni?/?Business News Americas

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The new president of Venezuela will have to close a US$23bn deficit in infrastructure investments, according to a study published by local construction chamber CVC.

"Neighboring countries such as Colombia, Peru and Chile earmark between 5% and 7% of their GDP for infrastructure projects, far more than Venezuela does," CVC president Gilberto Dao told BNamericas.

Investments in new infrastructure - excluding oil & gas and housing - amounted to 2% of GDP in 2011, according to CVC figures.

Sectors such as transport, health, potable water and sewerage rank at the top of the agenda for investments in infrastructure, Dao said.

Meanwhile, maintenance work totaling 60bn bol?vares (US$13.8bn) needs to be carried out on existing infrastructure, CVC estimates.

"The new government should first develop a solid and continuous maintenance policy for infrastructure," Enzo Betancourt, head of Venezuela's engineers' chamber, told BNamericas.

Venezuela ranked 117th out of 139 countries in the 2011 World Economic Forum (WEF) global ranking for quality of overall infrastructure, worse than any other Latin American country except Paraguay.

The WEF has long highlighted the impact of Venezuela's investment environment on its infrastructure.

"The generally unflattering portrait of Venezuela's investment environment is mirrored by a relatively bad assessment of its infrastructure quality," according to a 2007 WEF report.

The country needs to engage better with private investors, both Dao and Betancourt said.

"We suggest a review of the laws that allow private investors to take part in such investments through public-private partnerships," Dao said. "Funds for new infrastructure projects could also come from the issuance of specific infrastructure bonds."

Venezuela will hold its presidential election on October 7, with incumbent Hugo Ch?vez and opposition leader Henrique Capriles the main contenders.

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