Bill 719.

Summary.

The bill would amend the scope of Law 93 of September 19, 2019. It would cover the Central Government, autonomous and semiautonomous entities in the nonfinancial public sector, municipalities, and companies in which the State owns at least 51% of the share capital. It would exclude the Panama Canal Authority (Autoridad del Canal de Panamá), National Bank of Panama (Banco Nacional de Panamá), Savings Bank (Caja de Ahorros), Agricultural Development Bank (Banco de Desarrollo Agropecuario), National Mortgage Bank (Banco Hipotecario Nacional), Agricultural Insurance Institute (Instituto de Seguro Agropecuario), Securities Market Superintendency (Superintendencia del Mercado de Valores), and Banking Superintendency of Panama (Superintendencia de Bancos de Panamá). It would also exclude specified public services, the supply of drinking water to end users, and metallic mineral extraction concessions.

The revised glossary would define participants, projects, contracts, and financing instruments. It would distinguish firm from contingent commitments; include availability payments and shadow tolls; and address the risk allocation matrix, service levels, and reference value. Creditors would have a step-in right following an uncured contractor default, subject to financing agreements, the law, and its regulations. Projects could originate in the public or private sector and would have to align with national and sector priorities. Public initiatives would also align with the Government Strategic Plan. The Governing Body (Ente Rector) could identify projects for public origination and set periods and subject areas for private initiatives.

Contracts would be governed by the law, its regulations, and project instruments in the prescribed order; Law 22 of 2006 and other rules applicable in the Republic of Panama would apply subsidiarily in the specified circumstances. The Governing Body would set priorities, authorize project development and tendering, and approve tender documents, contracts, and amendments. Changing an earlier decision would require unanimity and a reasoned resolution published on its website. The National PPP Secretariat (Secretaría Nacional de APP), attached to the Ministry of the Presidency (Ministerio de la Presidencia), would provide technical support, review proposals and reports, coordinate with the Ministry of Economy and Finance (Ministerio de Economía y Finanzas), verify fiscal space and budget limits, maintain the PPP Register, and conduct ex post contract evaluations.

Contracting public entities would identify and prepare projects, run tenders, sign authorized contracts, and supervise performance. They would submit semiannual reports on projects and committed payments, provide information for ex post evaluations, and cover their costs. The Office of the Comptroller General of the Republic (Contraloría General de la República) would retain the oversight provided under Law 32 of 1984. Contracting entities would annually update quantifiable firm and contingent commitments for the Secretariat and the Ministry of Economy and Finance under the budget calendar. Each project's viability would be studied at a level appropriate to its scale and complexity, covering costs and benefits, technical, commercial, financial, regulatory, environmental, and social matters, and value for money.

The private initiative regime would allow unsolicited proposals and proposals submitted following a call. The Secretariat would register them and conduct a preliminary review; similar proposals would be examined in filing order. The procedure would comprise submission, feasibility studies backed by a proposal validity bond, and promotion and procurement through a tender. The originator of an approved initiative could recover documented costs within an authorized ceiling, match the provisionally successful bid, or receive the award if no other bidders participated. Regulations would develop requirements, guarantees, benefits, and grounds for rejection.

Before bids were submitted, participants would have a consultation period on the tender documents; substantial amendments would require Governing Body approval. Tendering would separate technical evaluation from the opening of financial bids and would be advertised at least 60 business days in advance. Resolutions of the contracting entity could be challenged before the Public Procurement Administrative Tribunal (Tribunal Administrativo de Contrataciones Públicas) within 10 business days, with the bond specified in the tender documents, capped at 1% of estimated investment value; challenges would have no suspensive effect. Countersigned contracts would be published in the Official Gazette within 30 calendar days. Their maximum initial term would be 40 years, extendable by up to 10 additional years under the applicable studies and contract rules.

The bill would establish a permanent PPP Fund, administered by the Secretariat and overseen by the Comptroller General, to finance its functions, studies, and technical assistance. Its resources could include public allocations, program related payments, contributions, and investment returns; they would be deposited with the National Bank of Panama or the Savings Bank. It would also establish a technical career system for Secretariat employees, with Law 9 of 1994 applying subsidiarily. The Executive Branch (Órgano Ejecutivo) would issue regulations, and the final provisions would be renumbered, including rules concerning earlier concessions linked to the Cabinet Council (Consejo de Gabinete). Public entities, municipalities, investors, lenders, contractors, and users of public infrastructure and services could be affected by these provisions.