MercoPress. South Atlantic News Agency

Bloated budget with limited margin, for Lula da Silva’s successor

Lula da Silva likes infrastructure projects

Whoever succeeds Brazilian President Lula da Silva next January will receive a budget highly committed to infrastructure and with limited margin for economic decision-making according to Sunday reports in the Rio do Janeiro press.

On January first Lula da Silva will hand the presidential sash to the winner of next October’s election, a race which according to the public opinion polls has been cut to two main candidates: governor of Sao Paulo Jose Serra, representing the opposition party Brazilian Social Democrats, PSDB, and cabinet chief Dilma Rousseff, the incumbent hopeful in representation of the ruling Workers Party.

According to O’Globo, there are 19.5 billion US dollars in contracts for infrastructure works signed between 2007 and 2010 but which have to be paid by whoever replaces Lula da Silva.

O’Globo also estimates that the Lula da Silva administration has a backlog of 14 billion US dollars in works not leased or under construction.

“This means that the (Brazilian) government has only paid for 55.2% of the works contracted from 2007 to 2009”, and which were included in the infrastructure program promised by Lula da Silva for his second mandate.

The Rio based newspaper is optimistic to a point about the evolution of works this electoral year: it estimates 65% of contracts will be finished which is above average.

“Even in the hypothesis that the government accelerates the execution of works this year, above the average of previous years, --which is unlikely--, the available revenue in the 2010 budget will not be sufficient to address the expenses of later years, which will be pending”, added O’Globo.

In support of the incumbent candidate Rousseff the Lula da Silva administration is expected to announce at the end of March a program of public works that should be executed between 2011 and 2015, as a further stage of the infrastructure plan, but the bills will have to be paid by the next cabinet, be it of whatever colour.

The plan includes works in major infrastructure, sewage and drinking water, transport and energy and pharaonic undertakings such as the Belo Monte hydroelectric dam, the third largest in the world with an initial budget of 10.6 billion US dollars.

In the transport system, more specifically railways, there is a plan to build a super fast train linking Rio do Janeiro with Sao Paulo: the bill 18.4 billion US dollars.