BRAZIL: PRIVATIZATION & CONCESSION
April, 2019 – Brazil – Rossetti Advogados
At least 229 privatization and concession ongoing projects in 12 different sectors
With the inauguration of President Bolsonaro and his team, the year 2019 began with a perspective of advancing the privatization and concessions agenda in the country, amidst the change of federal and state governments, a better macroeconomic scenario and also due to a series of projects already inherited from previous administrations. There are at least 229 projects underway today in Brazil. And the number is set to rise as the Bolsonaro government and new governors have promised to expand the number of state-owned and sliced subsidiaries to be offered for sale, as well as public land and real estate.
The fiscal crisis and the breakdown of public accounts have put the privatization of state and airport services, highways, railroads and ports back on the country’s political and economic agenda.
Despite the fact that the privatization issue has a central role in the government plans, the transfer of assets and projects to the private sector has been slow in past years, due to the uncertainties of the electoral race, difficulties in the preparation of technical studies and modeling, besides political obstacles and legal disputes.
Currently there are at least 229 projects underway: 69 from the Federal Government, 103 from 14 States, and 57 from 8 Capitals of States.
The list includes projects for the sale of companies or public assets, but also concessions, PPPs (public-private partnerships), leases, contract extensions, among other modalities of transfer of control or management to private initiative.
The sale of assets or the privatization of public services is seen as one of the alternatives to obtain extra resources to reduce the burdens of public accounts, to alleviate expenses, and also to increase the volume of investments in infrastructure.
The forecast is of more than R $ 127.4 billion (U $ 40 billions) in investments over the next few years.
There are projects in as many as 12 sectors: Public Services; Airports; Sports and Events; Ports; Urban Mobility and transportation; Highways; Railways; Energy; Public Lightening; Parks; Mining; and Sanitation.
Airports, ports, railroads and highways concessions will be the priorities of 2019. Currently, of the 69 projects underway in the federal program, 12 are airports, 12 are railroads, 4 are ports and 8 are highways.
The first auction of airport concessions was held in March, and resulted in U$ 600 million collected by the Brazilian Government in the process. The main acquisitions were made by foreign groups, such as AENA, from Spain, and Zurich Airport from Switzerland.
In the highways area, the most advanced projects for the year are BR-364-365 / MG-GO and BR-101 / SC. And the government has already announced that it intends to include the Rio-Santos highway (section of BR-101) at the Nova Dutra (Rio-São Paulo) relaying auction where more than 800,000 pass every day.
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This article is based on publicly available information and given for informational purposes only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.