Research shows 12491 important works to be carried out until 2019

Transportation, energy and oil and gas are the areas that will demand most investments in the period

In addition to the actions turned to improve public services and quality of life in Brazilian cities, many infrastructure works, in a total of 12491 projects are included in the database of the fourth edition of the survey of investments in infrastructure commissioned by Sobratema. The survey covers a scenario of works to be carried out until 2019.

Information and works were monitored by the Creative company—expert in consulting and research—and show in perspective the huge potential of opportunities available in Brazil for the companies that work in the construction chain.

The survey covered works in the areas of Energy,  divided in distribution, generation, transmission and other works; Oil and Gas, divided in alcohol pipelines, biofuels, gas exploration and production, gas pipelines, petrochemical, refining, gas treatment units, plants and other works; Sanitation, including works of water supply, drainage, sewage and others; Transportation, involving works of airports, railways, subways, ports and waterways, roads, urban roads and others; Industry, divided in works of mining and plant construction; Housing infrastructure, including works of urbanization, housing and others; Sport infrastructure, involving works of stadiums and sport arenas; and Others, involving works of hotels and resorts, malls, hospitals, universities and others.

In the research, the area of oil and gas is in the second place in terms of financial income, only below the area of transport, which will receive most resources of the general total. The area of oil and gas will receive approximately R$ 319.5 billion, corresponding to 27.32 percent of the total. The Business and Management Plan of Petrobras (PNG 2014-2018) has an investment target of US$ 220.6 billion in company resources plus US$ 63.0 billion that partner companies will invest in the works to be carried out during this period, resulting in a total of US$ 283.6 billion. Exploration and Production (E&P) correspond to 82.2 percent of this total, followed by refining, with 12.6 percent.

The third position is with the area of energy, with estimated income of R$ 191.7 billion, mainly for generation works, that correspond to 84.4 percent of this total. The relationship between renewable (41 percent) and non-renewable (59 percent) sources continues relatively stable, with highlight for the increase in sugar cane biomass (+ 9.3 percent) and natural gas (+ 15.9 percent) in relation to 2012. The internal availability of energy increased 4.5 percent in 2013. The four works with highest investment are the hydroelectric plants of Belo Monte and São Luiz do Tapajós, in the state of Pará, and Jirau and Santo Antônio, in the state of Rondônia.

Still according to the research, the industrial area responds by 8.72 percent of financial incomes, with an estimated total of R$ 102 billion. Works with highest values are in the areas of mining and steel, standing out also the areas of cellulose and paper, fertilizers and car manufacturing.

The group classified as Others includes hotels and resorts, malls, hospitals, universities, theaters and public buildings. It will receive investments of R$ 70.2 billion. Investments in sport infrastructure are also in the survey, with a total of R$ 4.1 billion in the period 2014-2019.

Forecast for 2015

According to the research Main Investments of Infrastructure in Brazil, the total of works that will be carried out in the period 2014-2019 is estimated in R$ 458.9 billion. This means R$ 76.48 billion of investments per year. Dividing this figure by the GDP foreseen for 2014, of R$ 4.86 trillion—considering an increase of 0.4 percent for this year—we will have an average investment of 1.57 percent of the GDP in infrastructure. This value is considered still low if compared to some Latin American countries.

Considering only works that are being carried out, the area with highest contribution to the total of investment is oil and gas with 46.7 percent or R$ 214 billion. Petrobras responds by 80 percent of this total. The area of transport comes in the second place with a total of R$ 76 billion (16.6 percent) and the area of energy comes in the third place with R$ 57 billion (12.5 percent).

In terms of investment by region, Southeast continues to be the leader, concentrating 57.4 percent of the investments—what corresponds to R$ 263.5 billion—followed by Northeast (15.5 percent) and North (11 percent). These three regions will receive a total of 83.9 percent of the investments.

DISTRIBUTION OF INVESTMENTS BY BUSINESS

Research

We started the survey with main contractors that carry out infrastructure works asking if they grew in 2013: 80 percent of them answered YES. According to interviewed contractors, the areas that boosted this growth were:

-- Urban mobility/ transport: 50%

-- Energy: 34%

-- Oil and gas: 8%

-- Mining: 8%

Other important point checked in relation to 2013 was if the year attended their expectations: 20 percent answered NO, 30 percent said that it attended partially and that they expected more for this year. Thus, 50 percent of the companies said that 2013 did NOT attend or attended PARTIALLY their expectations. The companies that had their expectations unattended—totally or partially—said that they expected more efficiency from the government, faster approval of the projects and that promises come true.

Companies were also asked about the main bottlenecks of infrastructure works in Brazil. The results may be divided in four blocks:

-- BUREAUCRACY: 70 percent of interviewed companies said that this is the main bottleneck and showed several obstacles related to this subject: slow pace in liberation of projects and environmental licenses, too much paperwork and lack or failure in the definition of some processes, complex rules that bring additional problems.

MODELS OF BIDDING

CONTRACTING: 50 percent said that failures in the contracting model turn bids less attractive for investors.

-- PLANNING DISCONTINUITY: 50 percent said that there is no continuity in planning, what harms the internal global long-time planning of the companies.

-- PETROBRAS: 20 percent said that the crisis of Petrobras is affecting considerably the construction chain.

About the perspectives for 2014, the result was the following:

-- 50 percent of the companies believe that 2014 will be similar to 2013.

-- 30 percent believe in an increase (67 percent believe in an increase up to 5 percent and 33 percent in an increase above 10 percent).

-- 10 percent said that 2014 is too complicated and there is no way to foresee a position.

-- 10 percent believe that the result of 2014 will be lower than that of 2013.

To ensure that the results foreseen for 2014 come true, 75 percent of the interviewed contractors said that the works of PIL (Program of Logistic Integration) have to come out of the paper and 25 percent said that the works of Petrobras have to continue.