Brazilian officials, concessionaires to hold talks on reviewing contracts

The Brazilian government will start this month a round of talks with highway concessionaires to discuss reviewing contracts amid the effects of COVID-19.

Land transport agency ANTT will hold a first round of meetings with highway operators between August 17 and 28.

"The fact that ANTT is calling participants to discuss contracts is positive, because historically the agency has always been rigid about reviewing contracts and issues related to adjusting contracts," Joaquim Augusto Melo de Queiroz, a lawyer at Fialdini Einsfeld Advogados, a law firm specializing in concession contracts, told BNamericas. 

"Even with contract adjustments, I believe that some concessionaires will not be able to continue with their contracts given their difficult financial conditions," he added. 

The meetings will be held online as certain social distancing measure remain in place. Over the weekend Brazil exceeded 100,000 coronavirus-related fatalities.

"Subsequently, a first methodology proposal will be presented, which will be submitted to public consultation and will be the subject of a second round of participatory meetings," ANTT said in a statement.

The meetings will also be attended by representatives of highway concessionaires association ABCR, cargo transport users group ANUT, transport confederation CNT and infrastructure and basic industries association ABDIB.

Highway concessionaires have seen their revenues slump amid the COVID-19 crisis.

In January-July, traffic on toll roads dropped 18.8% versus the same period 2019, according to ABCR.

The review of concession contracts is likely to be extended to other sectors, such as airports, subways and railways, which have also seen steep falls in passenger numbers.

The move comes as the government is intent on advancing with its agenda of concessions and guaranteeing legal security for such contracts is considered key.