Brazil creates taskforce to help prevent legal headwinds for infrastructure projects

Brazil’s government created within the attorney general's office (AGU) a taskforce to follow the progress of the projects included in its recently announced PAC investment program in an attempt to avoid prolonged legal battles and the halting of works.

The taskforce comprise 30 government lawyers specializing in public works to oversee all stages of projects including the relationship with the audit court, TCU, to prevent prolonged legal headwinds, a federal government spokesperson told BNamericas.

Earlier this month, the government announced details of the PAC, which is expected to unleash investments of 1.7tn reais (US$349bn), with 1.4tn reais to be spent by the end of 2026 when President Luiz Inácio Lula da Silva's term concludes.

The investments will be made through public spending, including by state companies, and concessions and PPPs.

Many of the projects included in the program are works that are halted for various reasons, including concessions currently in legal limbo, with companies in various infrastructure areas trying to return their contracts and the government finding it difficult to speed up the rebidding process.

Companies may return concessions but the process is lengthy and involves potential compensation payments.

The government reached an agreement with the TCU to authorize that those contracts that are under discussion and being returned continue to receive investments from the companies until a new auction is held.

"Re-bidding is a euphemism for stopped work. When contracts from the past were sent for re-bidding because they were unbalanced, the first step of the companies was to stop the works and that was a brutal penalty for the population," transport minister Renan Filho told BNamericas.

"We have already talked with the TCU for an optimization of these contracts that are being returned and all these contracts will see the resumption of works," he added.