Brazil to auction Minas Gerais highway concession worth US$1.7bn in Q3

The Brazilian government will offer a concession contract for highway BR-381 in Minas Gerais state at an auction on August 29.

The 30-year contract comprises investments of up to 9.2bn reais (US$1.7bn), said the transport ministry in a statement. 

Of the total, 5.5bn reais will go to new works and 3.7bn reais for operational services.

The main works involve the widening of 134km and building 83km of additional lanes.

The 303km stretch to be offered runs between state capital Belo Horizonte and the city of Governador Valadares. 

The criteria to select the winner of the auction will be the lowest toll offered. 

BR-381 has long been known as the "highway of death" due to a high number of accidents and improved safety is a key part of the concession contract, as well as expanding traffic capacity.

There are sections where the engineering challenges are considered complex and there are also potential legal obstacles given the need to expropriate land for the widening works. To mitigate these risks, the government will assume the works on some sections of the highway.

The auction for BR-381 is part of the government’s busy highways agenda. 

For 2024, the federal authorities have said they plan to offer 13 highway concession contracts, which included a recent roadshow in the US to present projects to international investors.

“We have 13 highway concessions, which will be auctioned this year, in states such as Minas Gerais, Rio de Janeiro, Mato Grosso, Goiás, Rondônia and Paraná, which will bring in investments of 122bn reais. It’s a very diversified portfolio, but with one common feature, namely ensuring the flow of production across the country and to other destinations in the world," said George Santoro, the ministry's executive secretary, in a separate statement.