Brazil to Invest R$45 Billion in Privatized Infrastructure Concessions

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The federal government of Brazil announced on Tuesday (March 7th) the 55 infrastructure projects that are part of the Private Partnership Investment program (PPI), with investments estimated at R$45 billion.

During the meeting to discuss the PPI, President Michel Temer stated that the program is an important step towards decreasing unemployment.

“We need to do this soon, because what we want the most is to fight against unemployment,” Temer said at the opening of the PPI meeting on Wednesday.

According to the President the new investments in infrastructure are expected to generate 200,000 direct and indirect jobs in the country.

The projects include concessions of port terminals, transmission lines, railways and highways, to the private sector. Many of the projects however are renewals of existing concessions.

Among those to be renewed are important highways that cross the country and are major transport venues for the nation’s agricultural production. According to Transport Minister Maurício Quintella, however, the existing highway contracts will be respected until the end of the concession period.

“The contracts will be respected. There will be new bidding rounds for after the end of the concession period,” said Quintella in a press conference after the meeting. Highways are expected to receive investments of R$6 billion.

In the rail sector, where R$25 billion are to be invested, the government will authorize five railroads already under private concession contracts to enter into the contract renewal process in exchange for investments.

The railways include the Carajás Railroad (Pará and Maranhão), the Vitória-Minas Railroad, the FCA (Central-West and Southeast), the ALL-Malha Paulista and the MRS network, which passes through Minas Gerais, Rio de Janeiro and São Paulo.

According to officials these five lines, carry more than ninety percent of all goods transported by railroads in the country. The investments planned in the next five years for this segment is R$25 billion.

In the energy segment, 35 lots of transmission lines and electric power substations in seventeen states will be given over to the private sector. The auction for most of these lots will occur in the first half of this year, and officials expect to receive over R$12.7 billion in investments for the area.

Four port terminals will be handed over to private companies in the ports of Santana (PA), Itaqui (MA) and Paranaguá (PR). The government hopes the concessions will bring investments of R$1.3 billion.

According to Minister Quintella no new airport concessions will be granted, since the government has already conceded the administration of six airports to the private sector, and four more (Porto Alegre, Salvador, Florianópolis and Fortaleza) will go up for auction on March 16th.

With the renewal of contracts and new concessions being given to the private sector, the government hopes to increase the country’s productivity.

The president of the National Bank for Economic and Social Development (BNDES), Maria Silvia Bastos Marques said the country’s infrastructure is already at the limit of its capacity and to increase production will have to improve the conditions of transport and energy transmission.

“The infrastructure sector is important to give competitiveness and productivity to other sectors,” said Marques to reporters after the meeting of the council.