The mild success of this PPP Law, its regulations, and other administrative guidelines has been confined to three tender projects, Dr. Gonzalo Castañeda General Hospital, International Museum of Baroque Art, Merida's Hospital, and Aqueduct Monterrey VI. The last one is a colossal project and consisted of the design, construction, operation and maintenance of a 372 km aqueduct to deliver 6m3/s of water from the Pánuco River to the Cerro Prieto Monterrey Aqueduct system. It was expected to increase by more than 40% the supply of potable water for the Monterrey metropolitan region – Mexico's third largest metropolis and industrial capital. The investment expected was two billion of US Dollars.
All the spirits uplifted by this enormous project came down when the Governor of the State of Monterrey publicly announced that he was determined to cancel it. Although the official decision has not been published, it will be interesting to analyze the grounds to take this decision. This determination casts doubt on the success of the PPP Law, particularly as it aimed at providing certainty for investors.
This project included arbitration conducted under the terms of the Commerce Code. Mexican Federal Laws will be the applicable law. The arbitration proceedings will be conducted in Spanish. The revocation of authorizations will not be subject to arbitration. The legal validity of administrative acts may only be analyzed by the competent Federal State Courts of the State of Nuevo Leon. If the decision of the Governor is confirmed, and payment of damages does not immediately come from the government, arbitration will have to be utilized to settle the payment.
With only three projects after three years of enactment, the success of the law is questioned, but a light appears on the horizon of telecommunications. The next mega PPP will be in the field of telecommunications. The Mexican constitutional reform in telecommunications mandates the creation of the “Shared Network” (Red Compartida). The Ministry of Communications and Transportation (Secretaría de Comunicaciones y Transportes “SCT” by its acronym in Spanish) in tandem with the Federal Telecommunications Regulator (Instituto Federal de Telecomunicaciones “IFT” by its acronym in Spanish) are the responsible bodies to implement this Network.
The project seeks to promote an effective access of broadband communication and telecommunications services to the population. Further, it will increase the quality's coverage of the mobile services in Mexico, and create more competition in the telecommunications sector. The Network will be composed of the installation of a wholesale shared public telecommunications network with national coverage. It will utilize 4G technology and shall consider the use of 90 MHz of the frequency of the 700 MHz band. The network will operate as a wholesaler and will provide services to other concessionaires (carriers) or authorized entities as Mobile Network Operators (MNO) and the Fixed Network Operators (FNW) that aim to venture into the mobile network market and the Mobile Virtual Network Operators (MVNO).
The project will be developed by a means of a PPP Contract, prior bidding process. The PPP shall design, finance, build, operate and maintain the Shared Network, as well as to commercialize the services rendered. This project requires an investment of ten billion US Dollars for the following 10 years. It shall commence operation in 2018. The Ministry and the IFT have published the criterion to develop this Network. Soon, they shall publish a project of bidding guidelines. Uncertainty again comes to view as some experts question the economic terms suggested for the bidding guidelines and how these terms will appeal to the interest of investors in this project. The Ministry and the IFT have a very important duty to present attractive bidding guidelines that entice investors to participate in the tender process