Passos Steps Up as New Transport Minister

By Sarah de Sainte Croix, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Earlier this month, Brazil’s former transport minister, Alfredo Nascimento, resigned following an article in Veja magazine which exposed alleged irregularities in the granting of contracts within the transport ministry. Four days later, on July 11th, president Dilma Rousseff appointed Paulo Sergio Passos – who had been Executive Secretary under Nacimento – in his place.

The article in Veja magazine pointed out a number of suspicious transactions. Primarily, it claimed that the ministry had levied bribes of four percent against contractors bidding for ministry business, and that the money had then been channeled into Nascimento’s political party the PR (Partido da República or Republican Party).

All of the minister’s closest aides were fired immediately. In Nascimento’s letter of resignation five days later, he declared that he was leaving, “In order to spontaneously collaborate with the investigation into activities at the Ministry of Transportation.”

Nascimento’s 27 year-old son, Gustavo Morais Pereira, is also being investigated by federal prosecutors in connection with the case. Suspicions were raised after the construction company he founded two years ago with a capital of just R$60,000, Forma Construções, increased its worth to over R$50 million – a growth of 86,500 percent.

Nascimento’s resignation made him the second minister in Rousseff’s six-month old administration to step down amidst corruption charges, following the Palocci scandal that erupted at the end of May.

Some pundits are praising Rousseff for her zero-tolerance approach, seeing the resignations as a sign of her determination to oust the wrong-doers, rein in spending and curb accelerating inflation, while at the same time overhauling Brazil’s drastically strained transport infrastructure.

Speaking to Bloomberg, Christopher Garman, a director for Latin America at the Washington-based political risk group Eurasia, said “[Dilma Rousseff] is not going to turn a blind eye to overpricing and over-inflating costs. Her government is going to be held accountable for its capacity to overcome some of these infrastructure bottlenecks. And the Transport Ministry is key.”

However, during a forum about the allegations surrounding this latest resignation, Senator Alvaro Dias criticized Rousseff’s decision to install Passos in Nascimento’s place, saying that “It seems contradictory on the part of President Dilma to have removed the Minister Alfredo Nascimento and other aides, but at the same time to have installed as the new minister someone from the same group.”

He went on to accuse that, “The current minister has knowledge of everything that went on surrounding this case.” Passos has been influential in the Ministry for Transport since the early 1970s.

However, Luiz Antônio Pagot, Director General of DNIT (The National Department for Transport Infrastructure), defended Rousseff’s decision, saying that “[Passos] is renowned for his technical competence and has an unblemished reputation.”

Passos has a significant task ahead of him in overhauling Brazil’s transport infrastructure to align it with the country’s economic growth. As a result of the dramatic increase in economic activity, the country’s aging highways system and inadequate ports and airports are now seriously over-stretched.

Weber Bahal from Brazil’s development ministry commented, “This is a country that exported US$100 billion in 2005 and US$200 billion in 2008. We need very quick and large investment in infrastructure.”