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UPDATE 2-Brazil seeks $14 bln investment with infrastructure concessions
March 7, 2017 / 9:22 PM / 9 months ago

UPDATE 2-Brazil seeks $14 bln investment with infrastructure concessions

(Adds details on railway and road concessions)

By Leonardo Goy

BRASILIA, March 7 (Reuters) - Brazil’s President Michel Temer launched an infrastructure concessions program on Tuesday to raise 45 billion reais ($14.43 billion) in investment for building and operating roads, port terminals, railways and power transmission lines.

The program is a key part of his strategy to restore business confidence and pull Brazil’s economy from its worst-ever recession after a sharp drop in commodity prices and a decade of profligate rule by the leftist Workers Party.

“There will be 45 billion reais in new investment in the energy, transport and sanitation sectors which will lead to the creation of 200,000 new direct and indirect jobs,” Temer said.

Inaugurating a meeting of the Investment Partnership Program (PPI), which will oversee concession tenders, Temer said 55 new projects would be opened to the private sector.

“We are leaving behind a deep recession and entering a phase of prosperity where private investment will be decisive,” said the president, who has said his top priority is curbing unemployment running above 12 percent.

Data on Tuesday showed a surprise acceleration in Brazil’s economic downturn in the final quarter of 2016, raising pressure on Temer and the central bank to promote growth.

The infrastructure program will kick off on March 16 with auctions to run the airports of Porto Alegre, Florianopolis, Salvador and Fortaleza, which are expected to draw much investor interest.

Wellington Moreira Franco, the minister in charge of the PPI, said the government would offer 35 concessions in energy transmission.

The PPI plan includes concessions to operate new terminals in the ports of Santana, Itaqui and Paranagua, and the extension of contracts in Vila do Conde, Niteroi and Santos, Brazil’s largest port. The plan offers early renovation of five railway concessions in return for new investment commitments.

With its budget squeezed by recession, Temer is betting an increase in private investment can revive the economy despite political turbulence from a sweeping anti-corruption investigation.

Rights to operate three highways will be auctioned before current licenses expire and will go to bidders who offer the biggest investment and the lowest toll rates, Transport Minister Maurício Quintella said.

The current concessionaires, whose contracts run through 2021, will be allowed to participate in the auctions, he said.

The three highways are the Via Dutra, between Sao Paulo and Rio de Janeiro, and the Concer and CRT motorways that link Rio to Juíz de Fora and Teresopolis. ($1 = 3.1179 reais) (Reporting by Anthony Boadle and Leonardo Goy; editing by James Dalgleish and Andrew Hay)

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