Rio de Janeiro state announces US$1.3 billion investment package over 3 years

RIO DE JANEIRO, BRAZIL – The government of Rio de Janeiro today will announce a R$17 (US$1.3) billion investment package over 3 years. Most of this amount – approximately R$10 billion – was raised from the auction of the state-owned sanitation company CEDAE, held in April.

Among the more than 50 projects included in the so-called “Pacto RJ,” to be detailed by governor Cláudio Castro (PL), are large-scale infrastructure works such as the creation of a 23-kilometer long surface subway line to cut through Baixada Fluminense, the collection of suburbs adjoining Rio de Janeiro’s capital, many of whose residents work in the city.

The capital will also see mobility improvement works. One proposal is to implement a 4-kilometer-long vehicle lane from Pavuna in the North Zone to Brasil Avenue, which will relieve traffic on Via Light.

There is also good news for the residents of the favela community known as Complexo do Alemão, where the cable car – halted since 2016 – should be recovered and start running again. On the other side of Guanabara Bay, a 13.5-kilometer exclusive bus corridor will connect the neighborhood of Neves, in São Gonçalo, to the capital’s downtown area.

According to the state government’s projections, the package should generate over 150,000 direct and indirect jobs and run until 2023. In addition to the R$10 billion in funds raised from the sale of CEDAE and investments in infrastructure made by the winning concessionaires, another R$2.5 billion in environmental works will be financed by the state-controlled share of CEDAE, while R$4.5 billion will be covered by the government’s own resources over the next 3 years.

Up to 80% of projects should be inaugurated by 2022, an election year. The state’s interior will see the rehabilitation of 882 km of roads. This project alone should generate 11,000 jobs. The package also includes the construction of 5,000 low-income homes and the refurbishment of 60 housing developments – which should benefit some 40,000 families.

In the education area, 50 CIEPs (Integrated Education Centers) will be renovated and connected to the internet. Another 11 schools – 7 of which in Rio and another 4 in Rio das Ostras, Cabo Frio, Búzios and Macaé – will also be built.

Projects that have been under discussion in the state are also on the list presented by the government. Security officers will carry cameras attached to their uniforms during operations. The amount spent with this equipment, currently in the bidding phase, will also be covered by the amount included in the “Pacto RJ.”

The state project should also complete the new “Museu da Imagem e do Som” (Image and Sound Museum – MIS) on Copacabana Beach. Paused since 2016, the works should be resumed later this year. The venue housing a historic audiovisual collection is expected to open its doors to the public in early 2023. The completion was budgeted at approximately R$54 million.

“This package was prepared with more than 50 actions that will change the landscape of our state. There is not a single city that wasn’t included,” the governor said.

Inter B. Consultancy’s economist Cláudio Frischtak hopes that the planning of works is accomplished and that the state will not waste the opportunity to leverage advances. “Historically, the governance of funds administered by the government in Rio de Janeiro is very fragile.”

“We have a history of undeniable waste of public money. We need, at this moment, to be very careful when assessing these works: planning, programming, the project, the execution and delivery.”

“The criteria used to choose these projects must also be assessed. Hopefully, they will all bring social return and we will not be wasting the funds raised with the sale of CEDAE, as we have seen happen other times,” he said.

The state government and Iguá yesterday morning signed the concession contract for CEDAE’s block 2. Bought for R$7.286 billion, the regional block was the second most valuable of the auction held in April and encompasses 19 neighborhoods of the capital’s West Zone, in addition to 2 neighboring municipalities.

The improvement of the Barra da Tijuca and Jacarepaguá lagoon system was the main focus of statements made by Governor Cláudio Castro and company representatives. Castro stated that the government can assist the concessionaire with funds to decontaminate the lagoons should the R$250 million foreseen in the bid notice be insufficient.