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Brazil highways’ maintenance to the private sector on 10 year contracts

Friday, February 24th 2012 - 07:30 UTC
Full article 2 comments
Infrastructure and Transport Department Executive director Tarcisio Gomes de Freitas Infrastructure and Transport Department Executive director Tarcisio Gomes de Freitas

After selling concessions for the expansion and operation of three major airports and a highway earlier in 2012, Brazil is preparing a plan to sell 10-year highway maintenance contracts without tolls, a newspaper said on Thursday.

The government expects to sell so-called shadow-toll concessions for the upkeep and improvement of some of its federal highways in 2012, the Estado de S.Paulo paper said citing the executive director of the National Infrastructure and Transport Department Tarcisio Gomes de Freitas.

The shadow-toll model for highway concessions has been successful in several countries (UK, France, Norway and Portugal) and derives its name from the transfer of the cost of a highway's improvement and upkeep to the taxpayer rather than the actual user of the road.

In the new auction model under design, the government would pay the lowest bidder for the operation and improvement of federal highways, many of which lack sufficient traffic to attract investors. Most of Brazil high-flow highways are already under concession with tolls.

Strong automobile sales coupled with growth in disposable income among Brazil's middle class have resulted in increases in the use of highways under concession at many multiples above the expansion of GDP in recent years.

The shadow-toll model has its appeal in countries like Brazil, where political opposition to privatizing national assets runs strong. Despite the ruling Workers' Party's aversion to the sale of state assets, the government raised 14 billion dollars by selling concession rights to private investors to upgrade and operate three of the country's main airports earlier this year.

The government of President Dilma Rousseff also sold a build-and-operate concession for a highway in Espirito Santo in January to the winning bidder Ecorodovias, in the first highway auction since 2009. Spanish construction company OHL is also a major concession holder in of highways in Brazil.

The recent concessions awarded to large Brazilian and international contractors and construction companies are seen as sign that the Rousseff government is willing to take a more market-based approach to logjams that for decades have hobbled investment in Brazil's underdeveloped infrastructure.

Categories: Economy, Politics, Brazil.

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  • GeoffWard2

    The problem isn't 'public or private',
    though this conditions the revenue and cost variables,
    it's the quality of the build itself. This is fundimental, and a serious weakness. This was understood 2000 years ago when the Romans built roads.

    Though the Brasilian motorways do suffer from land slides and frequently huge sections of motorway slide into valleys, the major problems are with the medium sized roads of the type that 'sustain' populations the whole world over.
    In Brasil these roads are commonly 'an inch or so of tarmac spread directly onto the sand/subsoil'.
    Thus, every year, potholes break up the road by the million - typically as deep as a car axle, full of rain water for a lot of the 'rainy season' and frequently marked by a tree branch placed in the hole. A road can look like an avenue of saplings and traffic weaves around and across the road in a sometimes deadly game of two-way-dodgems. Playing the game in the dusk/dark when pedestrians, bicycles, donkey carts and frequently motorbikes chose to travel against the flow of traffic (they consider it safer to see the oncoming traffic rather than to be hit up the rear) and you have a recipe for the clogged-chaos that hundreds of thousands of Brasilian feeder-roads have become.

    Road contour drainage and roadside drainage.
    Road sub-basement capable of retaining its integrity when constantly traveresed by 44 tonne axleweight trucks.
    High-grade impermeable road surfaces with visible, logical lanes and other road-surface markings.
    Raised road edgings and continuous pedestrian pavements maintained to 'road standard' in urban areas and
    reinforced road edgings in rural areas, especially where the 'hard-shoulder' is at risk of erosion and wash-away.

    Yes, there is a huge need to bring road infrastructures, road build, maintenance, and buried/aerial roadside utility services up to first world standard.
    Whatever it takes, public and private.

    Feb 24th, 2012 - 11:17 am 0
  • ChrisR

    1 GeoffWard2

    It must be a LatAm problem. Here in Uruguay I was amazed how the local A & B class roads are constructed in the way you describe, with much the same results.

    However, for us there is a ray of hope: elections this year! One of my Urugauyo friends has told me that 'all the potholes will be filled in soon'.

    This is so the present incumbents of the Intendencia will be able to claim that 'they are looking after your interests'. Doesn't fool too many people.

    Feb 26th, 2012 - 09:29 am 0
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