Countries › Uruguay › Guide › 3. Investing › Public private partnerships in Uruguay: what can be built, how projects are tendered, private initiatives, guarantees, lender rights and arbitration

Public private partnerships in Uruguay: what can be built, how projects are tendered, private initiatives, guarantees, lender rights and arbitration

Last verified: 2026-10-27 · Status: Stable

Under Ley Nº 18.786 a public body can hire a private company to design, build, operate and finance infrastructure for up to 35 years, in roads, rail, ports, airports, energy, waste, irrigation and social infrastructure such as prisons, schools and hospitals, but never the core educational, health or prison services themselves. Projects need a value for money study cleared by the Planning Office and the Ministry of Economy, tenders are published at least 90 days before bids are due, and a private proposer of an initiative gets up to a 10 percent scoring advantage and reimbursement of its study costs if it loses. Disputes go to binding arbitration at law, lenders can take pledges over project cash flows, and total PPP liabilities are capped at 9 percent of GDP.

USD figures use UYU 40.210 per US dollar, the Banco Central del Uruguay quotation for DLS. USA BILLETE on 27 October 2026, and the Unidad Indexada (UI) at UYU 6.6792 for 27 October 2026, both retrieved from the BCU quotations service on the verification date. Amounts the law sets in UI or pesos are quoted as written; conversions are for orientation only.

Key facts

PPP maximum term including extensions	35 yearsLey Nº 18.786 art. 4 literal G, as of 2026-10-27 · in force
Private initiative proposer: maximum scoring advantage	10 %Ley Nº 18.786 art. 37, as of 2026-10-27 · in force
Minimum publication of the call before bids are due	90 calendar daysDecreto Nº 17/012 art. 21 (Decreto Nº 251/015), as of 2026-10-27 · in force
Bid bond minimum validity	180 daysDecreto Nº 17/012 art. 25, as of 2026-10-27 · in force
Cap on modifications imposed by the administration	20 % of original budgetLey Nº 18.786 art. 47, as of 2026-10-27 · in force
Cap on agreed revisions (30 percent during construction)	50 % of original budgetLey Nº 18.786 art. 48, as of 2026-10-27 · in force
Administration step in maximum period	24 monthsLey Nº 18.786 art. 52, as of 2026-10-27 · in force
Cap on total PPP firm and contingent liabilities (NPV)	9 % of prior year GDPLey Nº 18.786 art. 62 (Ley Nº 19.924 art. 693), as of 2026-10-27 · in force
Cap on annual PPP payments to contractors	0.7 % of prior year GDPLey Nº 18.786 art. 62 (Ley Nº 19.924 art. 693), as of 2026-10-27 · in force
State may guarantee a minimum return	No Ley Nº 18.786 art. 6, as of 2026-10-27 · in force
PPP contract disputes go to arbitration	Yes Ley Nº 18.786 art. 54, as of 2026-10-27 · in force
BCU quotation, DLS. USA BILLETE	40.21 UYU per USDBanco Central del Uruguay quotation, as of 2026-10-27 · in force
Unidad Indexada (UI) value	6.6792 UYUBanco Central del Uruguay quotation, as of 2026-10-27 · in force

The rule

1. A PPP contract is one where a public administration entrusts a private party, for a set period, with the design, construction and operation of infrastructure, or any of them, plus its financing. A PPP may be used only after it is shown that other contracting methods do not satisfy the public purpose better. The total term including extensions cannot exceed 35 years.Ley Nº 18.786 (Public Private Partnership Law), Art. 2 and art. 4 literal G, 2011-07-19 official text · verified 2026-10-27

2. PPPs may be used for road (including rural roads), rail, port and airport works; energy infrastructure, subject to the electricity law and the ANCAP law; waste disposal and treatment; social infrastructure including prisons, health centres, schools, social housing, sports complexes and urban works; irrigation works; and land settlement under the Colonization Institute. They can never include educational services in schools, health services in health centres, or security, health and rehabilitation services in prisons, nor activities reserved exclusively to the State.Ley Nº 18.786, Art. 3, 2011-07-19 official text · verified 2026-10-27

3. The contractor may be paid by users, by the administration or both. The contract may include public contributions such as cash, subsidies, loans, financing guarantees, minimum revenue guarantees and tax exemptions (those that need it require an Executive decree), but may never guarantee a minimum rate of return.Ley Nº 18.786, Art. 5 and art. 6, 2011-07-19 official text · verified 2026-10-27

4. Before tendering, the contracting body prepares an evaluation document showing feasibility and that the PPP gives the highest value for money compared with other methods; it is submitted with the tender bases to the Oficina de Planeamiento y Presupuesto and the Ministry of Economy and Finance for review. A PPP Projects Unit within the Ministry follows the financial and budget side and risks, and the Ministry keeps a public PPP Projects Register of contracts, calls, private initiatives and audit reports.Ley Nº 18.786, Art. 13, art. 14, art. 16 and art. 18, 2011-07-19 official text · verified 2026-10-27

5. The administration may use any competitive method, including tender or auction, and may run a competitive dialogue with prequalified bidders to shape the specifications. The call for bids is published on the State procurement website at least 90 calendar days before bids are due. Bid bonds must be valid for at least 180 days.Ley Nº 18.786 art. 19 and art. 20; Decreto Nº 17/012 art. 21 (as worded by Decreto Nº 251/015) and art. 25, Ley art. 19 and 20; Decreto art. 21 and 25, 2015-09-14 official text · verified 2026-10-27 · changed: Decreto Nº 251/015 of 14 September 2015 reworded art. 21 of Decreto Nº 17/012 on publication of the call.

6. A technical commission ranks the bids; after a report of the PPP Projects Unit, the administration makes a reasoned provisional award, notified to all bidders. The Tribunal de Cuentas then has 30 calendar days to rule, silence counting as favourable. The final award cannot be made until 30 business days after notice of the provisional award, and the winner must first deliver deferred documents and post the performance guarantee, for which it has 30 business days from the provisional award. Bidders who withdraw without cause lose their bid bond, and the administration has priority over all other creditors to enforce guarantees.Ley Nº 18.786 art. 23, art. 25, art. 26 and art. 29; Decreto Nº 17/012 art. 27, Ley art. 23, 25, 26 and 29; Decreto art. 27, 2012-01-26 official text · verified 2026-10-27

7. Private initiatives are filed with the Corporación Nacional para el Desarrollo (CND) with a prefeasibility study. The CND checks formal requirements within 15 business days (with up to 15 calendar days to fix gaps) and sends its technical evaluation to the competent administration within 30 calendar days, which accepts, modifies or rejects without liability. If accepted, the proposer prepares the feasibility study. The proposer then gets reimbursement of accepted study costs, paid by the winner, if it does not win; a scoring advantage of up to 10 percent over the best bid; and free bid documents. The initiative is confidential; once the call is made it passes to the administration, and if no call is made the proposer keeps all rights over it for two years.
Cost to do it: No filing fee is set in the law or decree; the proposer bears the prefeasibility and feasibility studies, reimbursable only if it does not win.Ley Nº 18.786 art. 34 to art. 38; Decreto Nº 17/012 art. 45 and art. 46, Ley art. 35, 36, 37 and 38; Decreto art. 45 and 46, 2011-07-19 official text · verified 2026-10-27

8. The contract may let the administration modify works or services for public interest reasons, with compensation for net extra costs, up to 20 percent of the original works budget or operating spend. Agreed revisions under contractual triggers may reach 50 percent, but no more than 30 percent during construction. The contractor may assign the contract only with prior express consent and may subcontract unless the contract forbids it. The contracting body monitors performance and reports to the PPP Unit every six months, and any material breach within 10 business days.
Example: On a works budget of UYU 4,021,000,000, unilateral modifications are capped at UYU 804,200,000 and agreed revisions during construction at UYU 1,206,300,000. / About US$100 million of works, US$20 million and US$30 million.Ley Nº 18.786, Art. 39, art. 47, art. 48 and art. 50, 2011-07-19 official text · verified 2026-10-27

9. If the contract is terminated for the contractor's breach or the project is abandoned, the administration may step in through an administrator for up to 24 months while it decides to retender, auction or take over the activity. Sanctions take effect immediately and may be collected by withholding payments.Ley Nº 18.786, Art. 43, art. 46 and art. 52, 2011-07-19 official text · verified 2026-10-27

10. The contractor may grant its lenders pledges over future project cash flows, security trusts and other personal or real guarantees over present and future assets and rights. A pledgee may enforce on payment default or when the contract is terminated for the contractor's breach, notifying the administration; in the latter case within 10 days of being notified of the termination.Ley Nº 18.786, Art. 55 and art. 57, 2011-07-19 official text · verified 2026-10-27

11. Disputes over the application, interpretation, performance, compliance and termination of PPP contracts must go to arbitration. Arbitrators are appointed by agreement or under art. 480 of the Código General del Proceso, must decide at law, and the award is not subject to appeal.Ley Nº 18.786, Art. 54, 2011-07-19 official text · verified 2026-10-27

12. Until a new law is passed, the total firm and contingent liabilities from PPP contracts, at net present value, may not exceed 9 percent of the previous year's GDP, and annual commitments to private contractors may not exceed 7 per thousand of the previous year's GDP; projects are selected using value for money and strategic guidelines.Ley Nº 18.786, art. 62 as worded by Ley Nº 19.924 art. 693, Art. 62, 2020-12-18 official text · verified 2026-10-27 · changed: Ley Nº 19.924 of 18 December 2020 set the current caps from January 2021.

Stage	Term	Source
CND formal check of a private initiative	15 business days, plus up to 15 calendar days to fix gaps	Decreto Nº 17/012 art. 45
CND technical evaluation of the initiative	30 calendar days	Decreto Nº 17/012 art. 46
Publication of the call	At least 90 calendar days before bids	Decreto Nº 17/012 art. 21
Tribunal de Cuentas review of the provisional award	30 calendar days, silence is favourable	Ley Nº 18.786 art. 23
Earliest final award	30 business days after provisional award notice	Ley Nº 18.786 art. 23
Performance guarantee	Within 30 business days of the provisional award	Decreto Nº 17/012 art. 27
Step in by the administration	Up to 24 months	Ley Nº 18.786 art. 52

PPP procedure and the terms set by law and decree

Worked example

A foreign developer proposes a prison maintenance and operation PPP (construction and building services only, since prison security and rehabilitation services cannot be included under Ley Nº 18.786 art. 3). It files the initiative with prefeasibility at the CND, which evaluates it within 30 days (Decreto Nº 17/012 art. 46). If accepted and called, the developer bids with up to a 10 percent advantage; if another bidder wins, the winner repays the developer's accepted feasibility costs (Ley Nº 18.786 art. 37). As contractor it can pledge future availability payments to its lenders (art. 55) and any dispute goes to arbitration at law (art. 54).

Step by step

1. Check the asset type is within art. 3 and that the service is not a reserved core service.
2. Decide whether to wait for a public call or file a private initiative with the CND with a prefeasibility study (art. 35).
3. Follow the State procurement website for PPP calls; prepare for at least 90 days of bid period and a competitive dialogue if used (art. 19 and 20; Decreto art. 21).
4. Post a bid bond valid for at least 180 days (Decreto art. 25), then the performance guarantee within 30 business days of the provisional award (Decreto art. 27).
5. Arrange project finance with cash flow pledges or a security trust (art. 55), and set up reporting to the contracting body, which reports to the PPP Unit twice a year (art. 39).

Common traps

No minimum return can be guaranteed by contract, so demand risk must be priced or covered by availability payments (Ley Nº 18.786 art. 6).
The provisional award is not final: the Tribunal de Cuentas review and a 30 business day wait come first (art. 23).
If the proposer of a private initiative does not deliver the feasibility study on time, it loses all reimbursement and advantage rights (art. 37).
Lenders wanting to enforce after a termination for breach must notify the administration within 10 days of learning of it (art. 57).
Arbitral awards under PPP contracts cannot be appealed, so the arbitration clause and seat deserve close drafting (art. 54).

Sources

← Restricted activities and sector limits for foreign investors in Uruguay: no screening, rural land companies, audiovisual licences and domestic air servicesSelling to the State in Uruguay: procurement procedures and 2026 thresholds, RUPE registration, the 8 percent national preference, guarantees and appeals →