Brazil's investment partnerships program to prioritize less mature projects

This year, Brazil’s investment partnerships program PPI will develop concessions and PPPs that are less mature.

"Since last year, we have helped the various ministries of the federal government to advance their respective concession and PPP agendas, the more mature projects that are currently being auctioned and others under evaluation by [audit court] TCU," PPI head Marcus Cavalcanti told BNamericas.

"This support for more mature projects, mainly in the highway, water and port terminal sectors, will continue, but now we want to focus more on less advanced areas, on PPPs and concessions for hospitals, waterways, solid waste, and even drafting more contracts in the streetlighting area," he said.

The program is currently structuring five waterway contracts, for the Madeira, Tapajós, Solimões-Amazonas and Paraguay rivers and the Southern waterway, according to Cavalcanti.

Projects with social appeal are a particular focus, including housing programs, for which the government will donate unused federal properties in large cities.

ISSUES

Cavalcanti recognized that competition for contracts in advanced areas such as highways must improve.

"There are two initiatives that we're working on to attract more competition. One is the foreign exchange rate protection mechanism to attract more international investors to highway contracts, the other is the rebalancing of existing contracts that have problems, with the companies holding these contracts being able to clean up their balance sheets and gaining more room to participate in new auctions," he said.

Procedures for port terminals, however, will not undergo major changes.

"Port terminals are assets that attract a very specific participant, since each terminal has its own characteristics, some linked to containers, others to commodities, fuels. There will always be competition between specific stakeholders for these contracts," said Cavalcanti.

The PPI was created in 2016 to expand and strengthen public-private sector interaction, as a series of concessions and PPP auctions and privatizations were being planned.

The program is overseen by the office of the chief-of-staff.

PPI officials are currently analyzing federal growth program PAC, launched last year, to identify problems and devise solutions.