The Brazilian infrastructure minister predicts an increase in investment of $ 50 billion

The Brazilian infrastructure minister has projected growth in the development of the nation’s highways, railways and airports in $ 50 billion in investments in concession projects by the end of next year.

“Brazil will become a huge construction site,” Tarcísio Gomes de Freitas told the Financial Times.

“With the planned concessions, by the end of 2022, $ 50 billion will be contracted in investments to modernize airports, ports, highways and railways. That is, the equivalent of more than 30 years of public budget for infrastructure,” he said.

Investments will be a bright spot Brazilian economy, even before the pandemic, it experienced anemic growth in years, rising debt levels and rising unemployment. The largest nation in Latin America also suffers from poor infrastructure, especially poor quality roads that increase transportation costs, as well as the lack of basic sanitation services for millions of poor Brazilians.

The success of the concession model – an offer for companies and investors to invest and launch long-term projects – will also be a boost in the liberal economic agenda of government and finance minister Paulo Guedes, which has sought to reduce its role. terrible situation.

In last month’s auction week marathon, investors poured nearly $ 10 billion into a variety of projects, including 22 airports, five ports, a railroad that connects the country’s east coast to the western agricultural interior, and numerous road works. The French airport team Vinci won seven of the 22 airports, and the Brazilian companies took over the remaining concessions.

By the end of next year, the government plans to auction concessions for 100 assets.

For De Freitas and independent analysts, much of the success of the auctions was due to improvements in the Brazilian regulatory environment and growing confidence in legal frameworks.

“Brazil is well positioned to continue to attract international investors. The country is taking appropriate measures to attract them: it structures good projects, publishes advance notices in foreign languages, increases the level of legal certainty of projects and arbitration clauses in contracts, ”said Rafael Vanzella Machado, the company’s infrastructure lawyer, Meyer Advogados.

“We’ve seen improvements, and every day an extra step is taken in that direction. Brazil is experiencing a significant level of maturity. “

De Freitas added that Brazil’s commitment to fiscal discipline – a call made by Minister Guedes in recent years – has made investors more comfortable considering the country.

De Freitas said he was a trained military engineer who joined the public service more than a decade ago and said Brazil had an “urgent role” to transform its transportation matrix and remove large polluting trucks.

“Currently the railway segment accounts for 15% of the national logistics distribution, while road transport accounts for 65%. The government’s goal is to increase rail participation to 35 percent of the total freight transported by 2035,” he said. to build a railway to connect it with the arteries of the river.

“It is estimated that replacing the railroad with the railroad will reduce 1m tonnes of Co2 per year from the Amazon skies.”

This axis of railway construction has made de Freitas a well-known figure in the Brazilian agricultural states and some have suggested that he may have greater political intentions – a suggestion he denies.

However, it is the target of anger among environmentalists that many infrastructure projects that are emerging across the country have not been consulted.

“The government speaks directly to the business sector, but has no dialogue with civil society,” said Tatiana Oliveira of the Institute for Socio-Economic Research.

“There is a model of treating the environment as an obstacle to the progress and development of the country. The environment and communities have not always been taken into account. ”

Additional news from Carolina Pulice