Brazil’s Minas Gerais state to create regulatory agency for infra sector

Brazil’s Minas Gerais state is advancing with a plan to create a regulatory agency to oversee the infrastructure sector, amid the proliferation of concessions and PPPs contracts in the state. 

Through the secretariat for infrastructure and mobility, it submitted a bill to the state legislature for the creation of the agency, to be called Artemig.

"The authority will have the objective of regulating and supervising road, airport, waterway and railway infrastructure contracts under the state’s jurisdiction, which are operated by the private sector," said the state government in a statement.

"In practice, the agency will work to ensure that services granted to the private sector, through public-private partnerships or concessions, are provided correctly and charge users fair rates," it added.

The creation of regulatory agencies is usually welcomed by the private sector investors as it increases the legal certainty of contracts. 

In São Paulo, the state with the largest number of concessions and PPPs, investors cite the high degree of legal certainty due to the existence of regulatory agency Artesp, which supervises contracts offered by the state.

Meanwhile, in recent years, under the administration of governor Romeu Zema, Minas Gerais has accelerated its offering of concessions and PPPs.

There are currently five road concession contracts in force, MG-050, BR-135, lot Triângulo Mineiro, lot Sul de Minas and lot Varginha-Furnas, totaling around 2,250km of highways.

In addition, there is a concession contract regarding the Belo Horizonte beltway, with an extension of approximately 70km.

Five road concessions being structured by the state are expected to be offered in the coming quarter, comprising the Ouro Preto and Mariana lot, the Vetor Norte lot, the Noroeste lot, the Zona da Mata lot and the Quadrilátero Ferrífero lot. 

Artemig will also oversee the contracts of the Pampulha airport, the Zona da Mata regional airport and the Belo Horizonte metro.