Expansion and modernization of the infrastructure sector in Brazil

According to Tarcisio Gomes de Freitas, Investment Partnership Program (PPI) project coordination secretary, the government is planning to conduct 18 infrastructure auctions by the last four months of the year. Felipe Montoro Jens, an infrastructure projects experts, says that the secretary in June gave an assurance that the schedule would not be modified regardless of the current political discussions the Brazilian Government is going through.

Freitas said that the auctions would start in September 2017, and will work simultaneously with the discussions held in Congress. He continued to say that the PPI is ready for criticism from the private sector due to the large contractors being hit by the Lava Jato denunciation. Felipe Jens points out that the program targets the participation of new players in the concession.

Productivity challenge

Tarcisio Gomes de Freitas notes that the main challenge in Brazil that deters the increase of productivity lies in the expansion and modernization of the infrastructure sector. He advises that Brazil need to break away from the vicious cycle that reduces unemployment by driving away investors. He emphasized the importance of building on projects serves as the major advantage for the Investments Partnership Programs.

In the auction of transmission lines that happened in April, they created a hub attached to the ministries focusing on selecting projects that are succeeding and are attractive to the private sector. Felipe says that the auction was one of the largest in history.

PPI objectives

PPI focuses on correcting the past mistakes committed by the Public-Private Partnerships due to State over-intervention that resulted in the imbalance of project risk. Freitas when asked on whether the past errors by PPP in the recent years had any influences the foreign investor’s decisions he cited the presence of international investors in the airport concessions held in March.

The presence of foreign investors was an indication to the investors that the government had dropped the anti-business line and proceeded to the pro-business line with the president Michel Temer.

Felipe Jens reports that the rise to the presidency of Michel Temer in August 2016 saw PPI held 44 auctions in the infrastructure area. This translated to the capturing of R $23 billion of investment during his first year of administration.

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