To date, over PEN 6.2 billion has been pledged through the Public Works for Taxes (OXI) mechanism, both in the public and private sector, to bridge the production and social gaps in our country, said Darío Zegarra, chairman of the Alliance for Works for Taxes (ALOXI) during his presentation at Rumbo a PERUMIN, Central Peru Edition, an event organized by the Peruvian Institute of Mining Engineers (IIMP).
He explained that, thanks to this highly decentralizing mechanism, there are 463 awarded projects, which will benefit 21 million people nationwide. “So far, we are 129 private companies that have collaborated with this important mechanism,” he specified.
Darío Zegarra also highlighted the fact that the companies from the energy and mining sector are the main contributors to this mechanism in the different regions. “Of the 6.2 billion, 51% (3.191 billion) comes from the energy and mining sector. 90% of the OXI projects are decentralized,” he explained.
He commented that there is a direct correlation between public investment and a country’s growth. However, our investment is fragmented and geographically disperse, and, therefore, has little impact on our growth. “In the last 5 years, PEN 142.9 billion has remained unspent. Junín and Pasco are not the exception. There over 36% of their annual budget has not been unspent,” he commented.
Yet, there is still hope for change, since these two regions have already started using the Public Works for Taxes (OXI) mechanism. In Pasco, for instance, Nexa Resources Peru recently informed that it is currently funding the execution of works to improve pedestrian and vehicle trafficability in the human settlement Los Próceres, in the district of Yanacancha, with an investment of PEN 8 million.
Darío Zegarra later added that there is an opportunity to extend the use of the Public Works for Taxes scheme to investments in infrastructure optimization, expansion, rehabilitation, and replacement (IOARR), which is an interesting alternative.
“IOARRs are a mechanism that allows us to talk, not only about new infrastructure, but also about existing structure that can be improved. They are a great opportunity because they are low complexity investments," he commented.
Finally, the chairman of ALOXI noted that currently there is more than 14.8 billion available to invest in Public Works for Taxes. “Considering only 50% of the income tax paid by the largest companies, there is more than PEN 67,00 million available.”
Zegarra pointed out that there is still room for improvement when it comes to Public Works for Taxes and the collaboration between the public and private sectors. “We need a long-term decentralized vision; we cannot continue making fragmented investments. And it is also important to incorporate the idea of sustainability and resilience into these projects".