December 7, 2018 / 10:01 PM / 11 days ago

Exclusive: Brazil to complete key farm roadway by 2021 - incoming minister

BRASILIA (Reuters) - Brazil’s incoming infrastructure minister said on Friday that President-elect Jair Bolsonaro’s government planned to pave key agriculture highway BR-163 by early 2021 before privatizing the operations and maintenance of the road.

Tarcisio Gomes de Freitas, the future Infrastructure Minister, is seen after a meeting with Brazil's President-elect Jair Bolsonaro at the transition government building in Brasilia, Brazil November 27, 2018. REUTERS/Adriano Machado

In an interview with Reuters, Tarcisio Freitas laid out plans for completing and privatizing an array of infrastructure projects, including roadways, railways and airports, part of efforts to shore up Brazil’s budget deficit and improve lacking logistics support in much of the country.

“It’s a robust program of transferring (government) assets to private industry,” he said.

Freitas, a former army captain tipped to become minister after Bolsonaro assumes office Jan. 1, previously served as a director at the country’s transportation infrastructure agency Dnit and had been working in current President Michel Temer’s privatization program PPI.

Freitas said the government would begin work next year on the 90 kilometers that remain unpaved of BR-163, which connects Brazil’s largest soy producing state Mato Grosso with grain exporting ports in the north.

Freitas said he is confident Congress will approve the funds necessary for paving the road in a vote this month, given the strong role of the farm caucus.

The government will place the roadway on the list of projects to be privatized next year, the first step to ultimately transferring the completed roadway to a private buyer to operate, Freitas said.

The poor state of the highway has led to major backups of agricultural shipments, increasing transit times and costs for getting farm products to foreign markets.

For the influx of trucks in the 2019 harvest, which begins around February, the government will dispatch transportation agents, military and heavy machines to organize traffic and tackle anything holding up vehicles, he said.

Temer’s government privatized 105 state-owned assets throughout the PPI program, leaving 88 projects on a priority list to sell off. Freitas says the new government will continue adding to the list.

Freitas said Bolsonaro’s future government would seek to privatize more airports, without state-owned enterprises retaining a stake.

The government also hopes to kick-start investment in the Transnordestina, a 1,700-km railway that remains partially built after more than a decade of construction, he said. The project is aimed at transporting soy, corn and iron ore from Brazil’s interior across the north and northeast to port.

All projects for privatization will be priced and have a proposed return on investment that should be sufficient to attract bidders, but writing in hedges for exchange rate risk into contracts will be considered on a case-by-case basis, Freitas said.

Reporting by Jake Spring; Editing by Daniel Flynn, Bill Berkrot, Richard Chang and Diane Craft

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