Brazil to offer 13 highway concessions involving nearly US$25bn

Brazil plans 13 federal highway concession auctions involving 122bn reais (US$24.7bn) and covering 6,689km, according to transport ministry information obtained by BNamericas.

The number of auctions will demand serious efforts to adapt each notice and attract interest from private companies.

"For the auctions to generate greater competition, the business model must be attractive financially. An internal rate of return in line with the market or in terms of exposure and risk of the private firm" must be considered, says Alberto Sogayar, an infrastructure expert at law firm Sogayar e Alcântara Advogados.

"Regarding the second factor, the public administration must publish notices that foresee or, at least, minimize investment risk, also avoiding any reduction in the quality of the provision of services to highway users or even tariffs that make it unfeasible," he tells BNamericas.

Concerns regarding the preparation of notices among market participants are due to the low interest generated by recent auctions, which forced the government to suspend some of them.

The substantial investment needs will also require the involvement of development bank BNDES.

"BNDES will be the main protagonist, while multilateral institutions can be complementary," Paulo Dantas, a specialist in infrastructure and project financing at law firm Castro Barros Advogados, tells BNamericas.

Below is an overview of the contracts to be offered next year; exact auction dates are not yet available.

1. BR-381/MG-Belo Horizonte-Valadares (Minas Gerais state)

Extension: 304km

Investments and operational services: 10bn reais

2. BR-040/MG-Belo Horizonte-Juiz de Fora (Minas Gerais state)

Extension: 232km

Investments and operational services: 8.8bn reais

3. BR-262/MG-Uberaba-Betim (Minas Gerais state)

Extension: 439km

Investments and operational services: 7.9bn reais

4. BR-040/MG/RJ (Minas Gerais and Rio de Janeiro states)

Extension: 218km

Investments and operational services: 9bn reais

5. BR-369/373/376/PR and PR 170/232/445/090 Lot 3 (Paraná state)

Extension: 569km

Investments and operational services: 13.5bn reais

6. BR 163/277/PR and PR 158/180/182/280/483 Lot 6 (Paraná state)

Extension: 656km

Investments and operational services: 14.8bn reais

7. BR-153/262/GO/MG (Goiás and Minas Gerais states)

Extension: 531km

Investments and operational services: 9.4bn reais

8. BR-364/GO/MT-Rio Verde-Rondonópolis (Goiás and Mato Grosso states)

Extension: 503km

Investments and operational services: 5.5bn reais

9. BR-040/MG/GO Belo Horizonte Ring Road-Cristalina (Minas Gerais and Goiás states)

Extension: 595km

Investments and operational services: 10.6bn reais

10. BR-070/174/364/MT/RO-Vilhena-Cuiabá (Rondônia and Mato Grosso states)

Extension: 888km

Investments and operational services: 7.7bn reais

11. GO-020/060/070/080 (Goiás state)

Extension: 573km

Investments and operational services: 10.7bn reais

12. BR-364/RO-Porto Velho-Vilhena (Rondônia state)

Extension: 729km

Investments and operational services: 8.2bn reais

13. BR-060/452/GO-Rio Verde-Goiânia-Itumbiara  (Goiás state)

Extension: 453km

Investments and operational services: 6.3bn reais