Brazil sets date for new US$1.2bn highway concession auction

The Brazilian government announced a new auction for a highway concession contract.

The transport ministry will publish in the coming week the notice for a highway section in Goiás state and plans to hold the auction on December 12.

The contract to be offered is known as Rota Verde, or Green Route, and covers stretches of BR-060 and BR-452 totaling 426km.

“It is a very important route, especially for agribusiness, in addition to connecting the cities of Rio Verde, Goiânia and Itumbiara. These are highways with a high volume of traffic,” Viviane Esse, the national secretary of road transport at the ministry, said in a release.

Estimated investment during the 30-year concession contract is 6.86bn reais (US$1.22bn), comprising 4.03bn reais in capex and 2.83bn reais in opex.

The main works are converting 31.1km into a divided highway and construction of 112km of additional lanes.

The auction winner will be the company that offers the biggest discount on the reference rate for tolls.

The announcement comes at a time when the government has attracted new participants for highway concession contracts.

On Thursday, Brazilian asset manager 4UM won the auction for the concession of highway BR-381 in Minas Gerais state, which requires estimated investment of 9.3bn reais.

4UM, controlled by local families Malucelli, Salazar, Federmann and Backheuser, won after it offered a 0.94% discount on the tolls, defeating the other asset manager, Opportunity, which offered a discount of 0.10%.

"Today's auction marks a huge success because we are here with two new entrants in the road infrastructure area. This is our intention, to bring new entrants to the next highway auctions, not only the traditional companies that already operate in the road sector," transport minister Renan Filho said during the Thursday auction.

The 30-year concession comprises a 303km stretch between Minas Gerais state capital Belo Horizonte and the city of Governor Valadares.

Brazil is expected to hold a string of highway auctions before the end of this year. These include:

• On September 26, the federal government will hold the auction for the 30-year concession of the 595km Rota dos Cristais stretch of the BR-040/GO/MG highway between Belo Horizonte and Cristalina in Goiás state, involving 12bn reais.
• On October 31, the federal government will reoffer the 8.5bn-real concession for the BR-262 highway in Minas Gerais state. The main works under the 30-year concession include building 44.3km of divided highway, 169km of additional lanes and 3.63km of side roads, along with 10 viaducts and 17 footbridges.
• On October 30, São Paulo state will offer the 30-year, 8.7bn-real Rota Sorocabana highway concession, covering a 460km route connecting 17 cities.
• And on November 28, São Paulo has scheduled the auction for the 30-year Nova Raposo highway concession, requiring investment of 7.3bn reais.