Infrastructure market in the Dominican Republic

The Dominican Republic (DR) enacted Law 47-20 regulating public-private partnerships (P3s) on February 20, 2020, and created its P3 agency and made it operational in September of the same year.

In order to implement P3 projects in the country, the government created the General Direction of Public-Private Partnerships as an autonomous and decentralized entity of the state.

In March,2023, The DGAPP awarded the first P3 contract for the revamping of a small port in the Northeast to convert it into a cruise terminal. The estimated investment for this project is US$68M. There are several other proposals at different review/approval stages in sectors like renewable energy, transportation, infrastructure and services.

Key opportunities for Canadian infrastructure companies in the Dominican Republic:

• Energy
• Transportation (airports, highways, ports)
• Tourism
• Infrastructure

Notable challenges for Canadian infrastructure companies in the Dominican Republic:

• Strong presence of international competitors, many of which already have alliances with leading local engineering firms
• Potential delays in P3 projects due to a lack of experience with government authorities in the Dominican Republic, and upcoming Presidential elections in May 2024
• Strong competition from lower-cost countries

Dominican Republic business landscape:

The Dominican government identified tourism, transportation, water and wastewater, and energy as the priority sectors and subsectors on which to focus its P3 efforts across sectors.

The following 3 projects will be given priority to launch soon.

The Pedernales master tourism project

Pedernales has long been identified as a province with high tourism potential because of its natural attractions. However, as it is one of the poorest provinces in the country, it lacks proper basic infrastructure.

The Dominican government has started building basic infrastructure in this province in order to pave the way for subsequent investments to transform this area into a key tourism destination. A cruise terminal is already being built and a tender was recently launched for the construction of a first hotel.

Hotels will operate under a P3 contract under which the government will own the infrastructure, but private enterprises will operate them. Furthermore, the construction of an international airport in Pedernales is included in short-term plans and would also be executed under P3 terms.

Expansion of the energy transmission grid

This project aims to retrofit and expand the national energy transmission grid to cope with growing energy demand and installed capacity.

Investment is estimated at US$347 million. This project was submitted by a foreign firm and is being evaluated. If declared to be of "national interest," it must go through an open tender process for the contract to be awarded.

Amber highway (Autopista del Ambar)

This would be a 35-km, 4-lane toll highway between the cities of Santiago and Puerto Plata that would considerably shorten the time it requires to travel between the 2 cities, as there is now only an old 2-lane highway. Although it was initially proposed by a local private engineering firm, DGAPP later declared it to be of national interest, which means that it will go through a tender process for the contract to be awarded.

Summary

The DR is one of the more politically stable countries in the Americas with no radical political shifts happening in the recent decades. Infrastructure has historically been one of the main drivers of the Dominican economy, one that helps maintain its relevance and growth levels, despite the economic situation in the country.

Since taking power in August 2020, the Abinader administration has laid out a very ambitious infrastructure project that includes ports, airports, roads and water infrastructure.

Many of these projects have a P3 model, while others will be built with public funds. Implementation of these investment plans has been delayed by various factors, including the need to keep assigning funds to COVID-19 economic recovery.

It is recommended that Canadian companies with a potential interest in the Dominican market start performing due diligence as soon as they can, so that when project flow improves, they are ready to participate in requests for proposals, tenders and other project stages.

For more information on Infrastructure in the Dominican Republic market, please contact Regis Batista-Lemaire (regis.batista@international.gc.ca), Trade Commissioner for the ICT, Cleantech, Infrastructure, and Education sectors, in the Dominican Republic.