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The Brazilian Minister of Infrastructure had predicted that by the end of next year, investment in concession projects would reach US$50 billion, and the country’s highways, railways and airports would flourish.
“Brazil will become a huge construction site,” Tarcísio Gomes de Freitas (Tarcísio Gomes de Freitas) told the Financial Times.
“According to the planned concession rights, by the end of 2022, a $50 billion investment contract will be signed for the modernization of airports, ports, roads and railways. In other words, it is equivalent to more than 30 years of public infrastructure budgets.” He says.
These investments will be a rare bright spot for the company. Brazilian economyEven years before the pandemic, it has been hit by weak economic growth, soaring debt levels and rising unemployment. The largest country in Latin America is also plagued by weak infrastructure. In particular, poor quality roads increase transportation costs and lack basic health services for millions of poor Brazilians.
The success of the franchise model (companies and investors bidding for investment and operating long-term projects) will also promote the loose economic agenda of the government and finance minister Paulo Guedes, who has been working to reduce the role of the government. Clumsy state.
In the marathon auction week held last month, investors invested nearly 10 billion U.S. dollars in a series of projects, including 22 airports, five ports, a railway line connecting the country’s east coast and western agricultural interiors, and several Road works. French airport group Vinci won 7 out of 22 airports, and the remaining concessions were borne by the Brazilian company.
By the end of next year, the government plans to auction concessions for 100 assets.
For de Freitas and independent analysts, the auction’s success is largely due to the improvement of Brazil’s regulatory environment and increased trust in the legal framework.
“Brazil has the conditions to continue to attract international investors. Machado’s infrastructure lawyer Rafael Vanzella said that the country is taking the right measures to attract them-well-structured projects, released in foreign languages ahead of time. Notice to improve the legal security level of the project and the arbitration clause in the contract. Meyer Advogados.
“We have seen improvements and are taking additional steps in this direction every day. Brazil is reaching an important level of maturity.”
De Freitas added that Brazil’s commitment to fiscal discipline-the call of Minister Gidis in recent years-makes investors more comfortable when considering the country.
de Freitas, a well-trained Army engineer who entered the public service more than ten years ago, said that Brazil is facing an “urgent task” to change its transportation methods and get rid of heavily polluted trucks.
“Today, the railway sector only accounts for 15% of the national logistics and distribution, while road transport only accounts for 65%. The government’s goal is to increase the railway participation rate to 35% of the total freight volume by 2035.” He said, noting the government The flagship project is to build a railway to connect the vast agricultural interior with the artery along the Amazon River.
“It is estimated that simply replacing railways with roads can reduce up to 1 million tons of carbon dioxide from the Amazon sky every year.”
The focus on railway construction has made De Freitas a popular figure in Brazil’s agricultural state. Some people think he may have greater political ambitions, but he denied this suggestion.
However, he is the object of dissatisfaction with environmentalists. Environmentalists say that they have not yet been consulted with many of the infrastructure projects that have sprung up across the country.
Tatiana Oliveira of the Institute of Social Economics said: “The government has a direct dialogue with the business community, but not with civil society.”
“There is a model that sees the environment as an obstacle to the country’s progress and development. The environment and the community have been ignored.”
Other reports from Carolina Pulice
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