Brazil to Invest R$133B in Transport: Daily

By Lucy Jordan, Senior Contributing Reporter

BRASÍLIA, BRAZIL – In the latest in a raft of stimulus measures, the government on Wednesday announced a program that will see R$133 billion in state-directed private investment to bolster Brazil’s ailing transport infrastructure ahead of the World Cup and 2016 Olympics, Globo reported.

Transport Minister Paulo Passos said the government would award private firms with concessions of R$42.5 billion to renovate 5,700 km of highways, and R$91 billion to upgrade and construct 10,000 km of railways over the next 25 years.

Globo calculated that the R$133 billion package surpasses all investment in the transportation sector over the past five years – including ports, airports and subways, as well as roads and rail.

Over the past nine years, Globo calculated, R$169.4 billion has been invested in transportation, forty percent of which, or R$67.6 billion, came from the private sector, with an average annual investment of R$7.5 billion. The public sector, including state-owned enterprises, provided 60 percent, or R$101.8 billion in investment.

At the event in Brasília, Passos said that the new concessions “will have very favorable financing conditions,” and added that the investments would double the capacity of the country’s main roads.

After growing at an average rate of more than four percent from 2002 to 2010, Brazil’s economy has slowed significantly over the past year, growing just 2.7 percent in 2011 with official predictions for 2012 growth at 3.0 percent. Earlier this week, data from Brazil’s Banco Central (Central Bank, BC) showed a forty percent drop in foreign investment in the first six months of 2012.

Analysts frequently cite bottlenecks and poor infrastructure as a hindrance to Brazil’s competitiveness. In an interview last month, Ricardo Gottshalk, an economist and former Economic Adviser to São Paulo state government, told The Rio Times that Brazil needed to “increase significantly investment in infrastructure to reduce bottlenecks, expand supply capacity and increase the country’s overall competitiveness.”

It is expected that President Dilma Rousseff will unveil further stimulus measures, including tax relief and reduced energy bills for industries, later this week.

Read more (in Portuguese).

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