In Ecuador, the construction sector that is financed with public funds will suffer a cut of 51% in 2022

Due to the reduction in public funds, the construction sector is one of the most affected.

By 2022, 307 projects are expected to be completed with approximately USD 1.8 billion. That represents 51% less than budgeted for 2021.

Of every dollar in the General State Budget (PGE), only five cents will go to investment and public works during 2022.

The Government of Guillermo Lasso deepens the cut in this sector. In 2021, the allocation was USD 3,835.20 million directed to 626 projects. However, by 2022 the amount will be reduced to USD 1,870.68 million focused on 307 projects.

The construction area in the public sector has been hit by the economic crisis, at least 70% of the projects are promoted by the State.

Rodrigo Mena, construction real estate entrepreneur, commented that it is time for the private sector to take the lead for the reactivation of the sector.

Incentives, clear rules, and facilitation of public-private partnerships, and labor and tax reforms are needed, Mena said.

The Government has ensured that trade agreements and other measures will seek new investments until 2025.

24% of the investment budget, that is, USD 450.14 million, will be used for public works. Of that amount, USD 218.48 million will be under the responsibility of the Ministry of Transportation and Public Works.

Among the projects is the reconstruction of Esmeraldas and Manabí due to the 2016 earthquake. For this purpose, there will be USD 115.52 million.

On the other hand, USD 102.9 million will be used mainly for the reconstruction and maintenance of the country’s road network.

Marcelo Cabrera, Minister of Transport and Public Works, said that it will be sought that at least 45% of the highways are concessioned so that the private ones relieve a large part of the State’s obligations.