Brazil invites private sector to invest in new highways and railways plan

Thursday, August 16th 2012 - 01:38 UTC

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President Rousseff: Brazil must have infrastructure compatible with its size

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.

Categories: Economy, Investments, Politics, Brazil.

Tags: BNDES, Brazil, Brazilean railways plan, Dilma Rousseff, Paulo Passos.

Top Comments

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Ottona
Projects of this magnitude take time and real experience. Luckily Brazil has several world-class engineering and construction entities. Obviously- by signaling to the big private corporations, that they are part of the national team - Dilma is getting ready for her second term run 2014. She needs the support of the nationalists and the political center. Obviously, the Left is with her anyhow. Her coalition consists of 10+ political parties, including the bigges party in Brazil, the PMDB - which represents many of the 5+ million farmers.
Aug 16th, 2012 - 03:04 am 0
JoseAngeldeMonterrey
The key word here is “concessions”. What it means basically is that private enterprises will “invest” in highways, which will become very expensive toll-roads, as it happened in Spain and Mexico, where there are many toll-roads nobody uses because they are super expensive, to the extent that many a time local governments end up bulding their own parallel public high-ways next to the toll-ones.

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.
Aug 16th, 2012 - 03:29 am 0
Fido Dido
it's the private sector with government organization (BNDS).

Not the case in Europe nor in the US, where infrastructure are crumbling. But ach..austerity will do fine.
Aug 16th, 2012 - 05:33 am 0

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