The Peruvian Government after an evaluation at the end of the fiscal year 2016 reported that works for more than 700 million soles (Peruvian currency) were executed through the mechanism of Works for Taxes (OxI). Besides, the Government informed that according to the repercussion and the recent regulatory changes made to the mechanism of Works for Taxes, the works to be carried out under this scheme during 2017 were expected to exceed 1,500 million soles.

However, the natural events that affected the north coast of the country during February, March and April this year, might have an impact on the repercussion of this scheme since the cost of reconstruction would exceed 5,000 million soles.

For that reason, and considering the results of the mechanism of Works for Taxes for the existing infrastructure gap, another mechanism known as “Works for Lands” is being proposed. The aim of this new scheme would be to reinforce the riverbeds and better manage watersheds, by promoting private investment in the management of watersheds and ravines in the affected areas. This new mechanism would help expand the agricultural frontier in order to prevent future overflows and landslides that may cause damages such as those recently occurred.

Under the mechanism of Works for Lands, project financers will be able to offset their investment through the signing of contracts for assignment of use, lease, usufruct, surface rights and other modalities of contracts on land for agricultural use or for any other activity that may be carried out depending on the qualification of the land.