Crowdfunding Initiative for Highways Causes Stir in Colombia

Businessmen in Antioquia, one of the most important regions in Colombia, have decided to collect capital in a private fund to help construct public highways. The decision came after the Colombian government did not agree to provide the economic resources to finish important 4G highways in the department of Antioquia.

The highways that started the dispute were the Toyo Tunnel and Pacific 1. The governor, Andrés Julián Rendón, initiated a $1 billion campaign to complete the highways, but President Petro deemed it illegal, considering it soliciting rather than resource collection.

The Executive Director of the National Federation of Commerce and Businessmen (FENALCO) María José Bernal, said that while the 4G highways go through Antioquia, they benefit the entire country. She recalled that last year the minister of infrastructure announced that there was going to be a budget cut for the 4G highways, and claimed that this has caused the region to fall into uncertainty. 

She added that these projects are key for the country in terms of competitiveness and productivity. FENALCO has become one of the main promoters of fundraising by inviting every citizen of Antioquia to donate, in whatever capacity they can. 

The projects, which are less than 5% complete, have sparked tensions between the government and the region. Active sponsors play a crucial role in ensuring the completion of the highways, which hold significant potential for tourism and job creation The governor emphasized that the completion of the projects has the potential to take the local economy of Antioquia to the next level. 

Is the crowdfunding initiative legal?

President Petro is at the center of controversy regarding the collection in Antioquia. In his X account, the president suggested that collecting that amount of money might be an illegal way of massive and habitual fundraising. The president faces allegations of disseminating false information and spreading misinformation.

Experts have agreed that the collection is legal and questioned the president’s suggestion that it might constitute a crime. Iván Cancino from the firm Holland and Night established that the collection was within legal parameters, and concluded by saying that donations do not create expectations for a return on investment. That aspect clearly distinguishes donations from loans. 

Crowdfunding initiative for 4G highways

Despite the campaign’s seeming success, the data indicate a different reality. The more than 3,632 million pesos gathered account for just 0.36% of the total required to accomplish the one trillion peso target. If the collecting pace of the previous nine days is maintained from the beginning of the crowdfunding initiative, there will be around 2,500 days remaining to meet the target.

This implies that it would take over seven years to gather all of the funds required via contributions alone. This contradicts Rendón’s anticipation since he told Semana magazine that the target could be reached in less than one year.

This scenario calls into question the feasibility and efficacy of the funding plan, as well as the necessity to consider other solutions to ensure investment in Antioquia’s road infrastructure.

Former President Álvaro Uribe put forward an idea which was eventually implemented by the Government of Antioquia. Uribe proposed that one million Antioqueños donate one million pesos to generate the funds. Based on the reported donations, each individual has contributed an average of 313,383 pesos.

Alleged funding of illegal groups

Regarding the alleged funding by the Golf Clan (Clan del Golfo), a prominent Colombian neo-paramilitary group and currently the country’s largest drug cartel, Rendón said that there are no reports in this respect, but that 36 million pesos have been detected, and the necessary processes are being carried out to identify the source.

The governor highlighted that Bancolombia closely monitors donations, particularly those above ten million pesos, and that any improper transaction would be reported to the Attorney General’s Office to ensure that the appropriate inquiry is conducted.

The Ministry of Finance said that it would issue tax certificates for contributions, allowing donors to claim a 25% deduction on their income tax returns.