MercoPress. South Atlantic News Agency

IDB loan for Sao Paulo State to improve freight and passenger transport

The 400m dollars will help to fully rehabilitate 570 kilometers of highways

The Brazilian state of Sao Paulo will receive a loan for 480 million dollars from the Inter-American Development Bank (IDB) to improve freight and passenger transport in the state highway system in order to enhance competitiveness and regional and international integration by reducing transport costs and travel time.

 With its 41 million people and a third of the country’s gross domestic product, the state of São Paulo directly administers a road network marked by intensive use. Two thousand vehicles operate daily on 75% of the network while more than four thousand vehicles operate on 30% of the roadways.

The program will finance the rehabilitation of 570 kilometers of highways, including improved access facilities, construction and paving of third lanes and shoulders, designation of bicycle lanes, and highway signage upgrades. The works will result in greater higher safety in addition to improved efficiency. The Bank loan will also finance technical, economic, and environmental studies, as well as the preparation of engineering designs.

The São Paulo Department of Highways (DER/SP) will implement the program. Training will be provided to strengthen the department’s management capacity for performing internal audits. The improved capacity will result in enhanced implementation of internal control procedures and the development of a system for prioritizing investments that will improve DER/SP’s ability to allocate resources.

According to IDB project team Andrés Pereyra da Luz, “This project marks a further step in the partnership between the Bank and the state of São Paulo for improving the state’s logistical infrastructure and the strengthening of the DER/SP’s institutional capacity for allocating resources for the transport system.”

The IDB financing has a term of 25 years, a grace period of five years, and an interest rate based on LIBOR.

Brazilian cities were rocked by protests in some cases violent rioting during the months of June/July because of poor public services, mainly transport when there was an attempt to increase fares. Brazil has an outdated and dilapidated infrastructure system which increases freight costs and in some ports vessels have to queue for weeks before loading.