Bahia state seeks to unlock US$1.4bn bridge project involving Chinese firms

Brazil's Bahia state is seeking to unlock a PPP contract signed more than two years ago for the construction of the Salvador-Itaparica bridge.

In November 2020, the state signed the 6.9bn reais (US$1.4bn) contract with a consortium formed by China Communications Construction Company (CCCC) and China Railway 20 Bureau Group Corporation (CR20) to build and operate the 12.4km bridge. 

The state agreed to invest 1.5bn reais while the consortium would invest the remainder, but the project failed to advance.

Bahia governor Jerônimo Rodrigues held a meeting this week in China with representatives of the consortium to look for solutions, the state government said in a statement.

The companies are alleging that the project has been delayed by the COVID-19 pandemic and Russia’s war in Ukraine, which pushed up prices for construction materials and financing costs.

"They argue that with the pandemic and inflation, it will be necessary to rebalance prices and fundraising to finance the bridge project,” said Rodrigues.

Last week Brazilian regional development lender Banco do Nordeste approved 3bn reais to finance part of the project, he said, adding that the government and the consortium are in talks with federal development bank BNDES and an unnamed Chinese bank to secure additional financing.