Brazil sets date to auction first package of Paraná highways

Brazil's transport ministry is planning to hold an auction to offer a concession for the first package of Paraná highways on August 25.

Lot 1 comprises roads covering a total 473km and investments are outlined at 13.1bn reais (US$2.65bn) over the 30-year contract, with 7.9bn reais in capex and 5.2bn reais in opex.

This is the first of a six-lot package of 3,300 km of roads connecting Paranaguá port, the city of Curitiba, 29 municipalities across the state, linking the west and north of Paraná, and running to the Amizade bridge on the border with Paraguay. It is one of the biggest road concessions on offer and involves building new lanes, bridges and other works.

"The highways to be offered in Paraná are true crown jewels and the auctions will probably generate a lot of competition, with several interested companies, including new entrants," Marco Aurélio Barcelos, president of Brazilian highway concessionaire association ABCR, told BNamericas.

Work has been underway for months to structure the concessions, running into several delays, but the process has finally moved forward in recent weeks after state authorities agreed to let the federal government conduct the program.

That agreement was necessary because the federal government controls 65% of the road package, as it entails federal highways that cross the state.

“The concession will boost the state's competitiveness, guaranteeing the flow of products out of Paraná and providing greater access to Brazilian markets. This means new jobs, more income for the state and an improvement in people's living conditions," transport minister Renan Filho said in a statement.

The federal government is planning to offer the concessions for the lots in separate, staggered auctions. 

"7.9bn reais in private investments [capex] are outlined for lot 1. If we add lot 2, the dates of which will be announced shortly, that amount reaches 18.6bn reais for the 30-year contract. This means that Paraná alone will receive investments almost equal to the public funds to be spent in the entire country this year," the minister added.

Lot 2 involves the BR-153/277/369/PR and PR-092/151/239/407/408/411/508/804/855 highways, which have a total length of 605km.

For 2023, the transport ministry has approximately 21bn reais available to spend on Brazil's highways and railroads.

LOT 1

Lot 1 comprises the BR-277/373/376/476/PR highways and the revenues for the winning company or consortium are estimated at 27bn reais during the 30-year concession contract.

Some 47% of the planned 7.9bn-real capex will be used to expand and improve the highways, including widening 344km, and building 81km of additional lanes, 38km of third lanes and 41km of branch roads, according to land transport regulator ANTT. 

The project opex, put at 5.2bn reais, will include spending on general and administrative services, such as medical and mechanical services, truck stops and weighbridges, among others.

The winner of the auction will be the firm that offers the lowest tolls for road users.

“The Paraná highway concession model was designed to benefit the public with high-quality highways and fair tolls," the executive secretary of the transport ministry, George Santoro, said in a statement.