Roads: new “crop” of concessions promises good fruits

The government received a record number of companies interested in developing concession studies of 11 roads: 49 companies presented their offers.

The new phase of the Program of Investment in Logistics (PIL)—started by the government in June 9 with the purpose of ensuring continuity to the modernization process of the country’s infrastructure of transport—promises to give good fruits. The preliminary results of the edicts of Procedimentos de Manifestação de Interesse (Procedures of Expression of Interest) - PMIs for the concession of 11 roads and four airports—part of the initial phase of the process—are above the more optimistic expectations of the government. Road edicts received 314 proposals of study presented by 49 companies or consortiums that intend to carry out the studies. Airports received 92 proposals presented by 30 companies.

This was the highest number of companies interested in carrying out PMIs since this model started to be used. Through the PMIs, the government authorizes private companies to develop technical and feasibility studies about the works that will compose the bidding scope. After receiving the authorization, the companies will have to deliver the road studies in 180 days and airport studies in 90 days.

Investment budget for this new phase of PIL is R$ 198.4 billion, being R$ 69.2 billion to be spent between 2015 and 2018 and R$129.2 billion from 2019 on. Investments are divided as follows: approximately R$ 66.1 billion for roads; R$ 86.4 billion for railways; R$ 37.4 billion for ports and R$ 8.5 billion for airports.

For the president of the Union of Civil Construction in the State of São Paulo (SindusCon-SP), José Romeu Ferraz Neto, the market received quite well the renewed effort of the Ministry of Finance in turning the program more attractive to the investor, increasing the rates of return of the new concessions. And the record number of expressions of interest confirms that. The rate of return for the investors interested in take part in the auctions of road concessions passed from 7.2 percent to 9.2 percent per year; in airport concessions, it passed from 6.63 percent to 8.5 percent per year; and in port concessions, from 8 percent to 10 percent per year.

For the Minister of Planning, Budget and Administration Nelson Barbosa, the high number of companies interested shows the consolidation of an industry turned to the development of studies and projects in the country. “Our engineering and construction industry is wide, diversified and skilled to attend the demand of concession design and works”, says him.

In addition, according to the Minister, the numbers confirm that the PIL is in the right direction. Barbosa emphasizes that—in this second phase—the program selected carefully projects of investment that stimulate the interest of private companies. “This result confirms the potential and the dynamism of our economy, our capacity to attract investments and the diversification of our private area”.

Public calling edicts were issued in June 10 in the Official Gazette (DOU). They include 11 roads that will receive R$ 31.2 billion of investments in a total length of 4371 km in all regions: in the Northeastern, the states of Bahia and Pernambuco; in the Southeastern, the states of São Paulo, Minas Gerais and Rio de Janeiro; in the Center-western, the states of Mato Grosso do Sul and Mato Grosso; in the Southern, the states of Santa Catarina and Rio Grande do Sul; and in the Northern, the state of Rondônia.

Four road auctions are foreseen for this year, referred to projects started in the last year: BR-476/153/282/480/PR/SP; BR-163/MT/PA; BR-364/060/MT/GO and BR-364/GO/MG.