Brazil invites private sector to invest in new highways and railways plan
Brazil's government unveiled on Wednesday measures to lure up to 133 billion Reais (66 billion dollars) in private investment for new roads and railways needed to unclog the country's transportation bottlenecks.
The measures include a plan to double capacity of the country's main highways, with concessions for roads and railways, Transport Minister Paulo Passos said at an event in the capital Brasilia.
The government, through Brazil's massive state development bank BNDES, will also offer subsidized loans for investors looking to get in on the projects.
The steps are an effort by President Dilma Rousseff to modernize Brazil's economy, which has stalled over the past year, following average growth of more than 4% over much of the past decade.
Rousseff, during comments at the ceremony, said the measures would help Brazil become “richer, stronger, more modern and more competitive.” Such investments, she added, can make “Brazil finally have infrastructure compatible with its size.”
The government also hopes the investment will jump start the economy in the short term. The investments, the minister noted, are expected to take place over the next five years.
“This isn't a program for investments to be diluted over the next 15 or 20 years,” Passos said.
The program foresees concessions to expand the country's old and overloaded road and rail systems. In addition to plans for major highways, the government hopes to lure investments for up to 10.000 kilometres of Brazil's rail network.
The government in coming weeks is also expected to announce similar projects for the country's ports and airports.
Suggested Stories
-
May 20th 2013
Brazil opens ports to private investment hoping to ease bottlenecks strangling exports growth
-
May 24th 2013
Argentina and Brazil jointly developing satellites for South Atlantic research
-
May 22nd 2013
US airline closes 4bn dollars deal with Brazil’s Embraer for 40 commuter aircraft
-
May 22nd 2013
Uruguay: Mujica on a most ambitious mission to China after investments for ports and railways
19 comments Feed
Note: Comments do not reflect MercoPress’ opinions. They are the personal view of our users. We wish to keep this as open and unregulated as possible. However, rude or foul language, discriminative comments (based on ethnicity, religion, gender, nationality, sexual orientation or the sort), spamming or any other offensive or inappropriate behaviour will not be tolerated. Please report any inadequate posts to the editor. Comments must be in English. Thank you.
It doesn´t work. The government has to invest in public roads and that is an obligation that must not be ceeded or passed on to private enterprises who will look at it purely as a business opportunity. I am not against private enterprises participating in many infrastructure projects, but not on roads.
Not the case in Europe nor in the US, where infrastructure are crumbling. But ach..austerity will do fine.
Subsequently it can all be nationalised. As Think put it “It's the South American way”.
Jose: I agree in principle, but it really depends how much the government has to spend. In Chile we did the same thing. The highway north from Santiago was horrible, they concessioned it and now we have a very decent highway – but with expensive tolls. I would prefer we had good quality free roads like in the UK (don’t know what Fido is on about), but without the associated debt. Sometimes it is easier to do a deal with the devil.
#6 There are private highways in the USA - Indiana Toll Road, Google it.
#2 Private investment does work. The states of Sao Paulo and Parana in Brazil have privatized several highways that were before run by the state. Today they are perfectly maintained, with great emergency services and will come and even change your tire or help out with car problems at any time. Yeah we have to pay for the tolls and those can be expensive, but you should pay for any service you use. If taxes are lowered since the government won't need to maintain the highways anymore, then everyone will benefit.
www.getizoom.com/aboutITR.do;jsessionid=5A8E955277F46C3854ED90EDFDF5A63E
Still owned by the State of Indiana and leased and operated by the Spanish company Cintra.
Brazil´s government is famous for its state-run enterprises, why do they want to lease or give away high-way consessions? because it isn´t oil? that´s why they are not willing to invest billions of dollars there? because they “think” there are no vissible profits in providing high-ways to millions of people and joining communities together accross the country? Give me a break. Something smells wrong in here.
Building roads and providing securiy has been the primary function of the state from Roman times, they do it better because they build them taking into account many factors, not just profits, but also social and development factors.
I am in favor of private enterprises participating freely in all sectors of the economy, in fact I am not in favor of having government mammut enterprises dominating industrial or energetic sectors of the economy. But roads, security, public education, social security, public health, those are all responsabilities of the state.
To have your roads break up and wash away with each year's rains is unacceptable.
But roads, security, public education, social security, public health, those are all responsabilities of the state.
...is that the government does a crappy job at these things. Government building roads, providing education/social security/health care, negatively affects the poor more than anyone else. First, in most countries (there are exceptions), these government services suck; Brazil is a great case. Secondly they cost too much for what you get out of it; this means there is rampant corruption in government socialized services (again there are exceptions, but specifically we are talking of Brazil here). Finally the people that end up paying for these services are the poor. How you ask? Well businesses that have to pay the taxes that are utilized for these social services will simply pass the extra cost to the consumer. So you tax the milkman, and your milk will cost more. Gas is more expensive in Brazil because of the taxes. And the people that most feel these price increases are the poor. And what do they get out of it, some crappy service. Government just isn't as efficient (more bang for your buck) as the private sector. It spends money where money shouldn't be spent. Like random highways and bridges to tiny communities in the middle of nowhere.
Most 'tradesmen' such as builders, etc. have the mindset that doing 75% of the job is 'perfection'. Why, they ask me do I insist that they only use the products from one Barracca when there are other, cheaper suppliers? They just do not get the idea that spending on quality is worth doing.
The normal road system in Uruguay is typical of what I have seen in third world countries. Scrape off the overburden (earth, grass and weeds), roller what remains and then put 25 mm of blacktop onto it. After a few trucks have gone over the edge onto what laughingly passes as a shoulder and broken the consolidation up, you are left with very large shelled edges and grit and dirt over the width of the road. When it rains the water gets under the blacktop and then craters appear everywhere.
But, of course, when the local elections are on the incumbents promise they will repair the roads, even though they have not touched them for months. And they get voted back in!
Is it a LatAm thing?
I'm told the voters prefer it this way...
All-year-round hole-filling employs thousands of less skilled individuals.
It also creates employment in off-street car repair shops.
The one thing it does not do is allow the country to develop.
Developed nations' road building standards are not there just for fun - they actually mean something, and help a county get moving and keep moving.
And yes, holes get filled in in the days/weeks before every election.
LatAm is like this because they decided to go socialist before they had any decent political structure. Socialism is the spreading of wealth but not the creation of it. When you spread it around, some gets left for opportunistic politicians and in the case of LatAm where corruption is rampant, then you get stupid shit like you see there in Uruguay with the shitty roads. As for the private sector, the economy is too small and there isn't enough competition yet. If Uruguay is anything like Paraguay, you have one well know dude that makes the best windows, another that does tiling real well, etc. etc. So there isn't any incentive to do better quality work. Plus most locals don't demand the higher quality and thus are unwilling to pay for it.
Thanks guys, you have 'enlightened me about LatAm socialism also, :o)
Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!