The short-term outlook for El Salvador's construction and infrastructure market has improved slightly after the industry outperformed over much of 2019. Much of the growth achieved in the market is the result of the Fomilenio II programme, and as funding comes to an end over the coming years this will create a financing vacuum in the industry. While the government is looking to the public-private partnership model to attract investment, as well as foreign funding, particularly from Asian markets, the challenging business environment in El Salvador will continue to limit growth potential.
The short-term viewpoint for El Salvador's construction market remains broadly positive. Foreign development funding is driving forward a number of key projects and there is growing private investor interest leading to growth across the residential, transport and energy infrastructure sectors. That being said, with the Fomilenio II programme coming to an end in 2020, growth in the market is set to slow significantly as public spending capacity will be insufficient to maintain momentum. Additional risk factors, such as skilled labour shortages and the potential withdrawal of foreign aid from the US, could also deter investors from committing to the market.
The new governmental administration plans to develop five infrastructure projects in El Salvador under the Public-Private Partnership model, which would require an investment of approximately $545 million. The works of illumination of highways, the construction of a terminal of load and an administrative center, are some of the projects that the administration plans to tender and award, under the format of Public Private Partner.
Additionally, the construction of a stadium and the national library, as well as the development of infrastructure in tourist areas, are some of the projects that would be financed by the Asian giant in El Salvador, as part of its non-reimbursable cooperation programs in order to promote joint development and increase the well-being of both peoples, the Chinese Embassy in El Salvador announced.
Improvements made to airports, port, railroads and roads are as follow:
Monsenor Oscar Arnulfo Romero Airport:
- New landing system by instrumentation.
- Renovated and bigger main entrance.
- VIP room with FIDS flights information.
- Extension of the arriving lobby.
- Commercial development (more shops).
- Construction of new office building.
- Renewable energy, the system is composed of 1,932 solar panels for a coverage of 5,000m2.
- New sewage collection pipes, which take the sewage to a recycling pond.
- System for controlling fire and renew drinking water.
- Electric sub-station.
- General material warehouse.
- Installation of lights on the landing strip, international platform and running roads.
- Maintenance of the landing strip
- Improvement of the control tower,
- Installation of two meteorological stations.
- X ray equipment.
- Installation of backing system for the vigilance system.
- Installation of fire detection system of warehouse no.3.
- Supply of two clams 15mts3
- Construction of parking lot and cargo warehouse
La Union port
- Maintenance of the buoy and installation of new one at the navigation channel.
- Rehabilitation of the rail station for museum.
- Construction and renew of Litoral road.
- Construction of San Miguel peripheral road. This will improve the transit of cargo trucks from the west to the east part of the country. Trucks will not pass through the city.
Communications (2017- CIA)
- General assessment: multiple mobile-cellular began rolling out Long Term Evolution (LTE) data services in late-2016; Internet usage grew almost 400% between 2007 and 2015; 6% of phones are fixed while 94% are mobile (2018)
- Domestic: nationwide microwave radio relay system; growth in fixed-line services 11 per 100, has slowed in the face of mobile-cellular competition at 162 per 100 (2019)
- International: country code - 503; satellite earth station - 1 Intelsat (Atlantic Ocean); connected to Central American Microwave System (2019).
- Multiple privately owned national terrestrial TV networks, supplemented by cable TV networks that carry international channels; hundreds of commercial radio broadcast stations and 1 government-owned radio broadcast station; transition to digital transmission to begin in 2018 along with adaptation of the Japanese-Brazilian Digital Standard (ISDB-T)
- 1,785,254 internet users (2016)