Govt. to submit public-private partnership bill to congress

Brazil's federal government will submit a bill to congress Wednesday (Nov.12) to promote public-private partnerships to carry out needed infrastructure investments, state news agencia Agencia Brasil quoted planning, budget and management minister Guido Mantega as saying Tuesday. A fund will be created to guarantee private company payments by future governments during the term of project contracts that in some cases will be as long as 30 years, said Mantega. He added that the bill includes a social responsibility clause, which states that in case of ties for government contracts, the company with a greater capacity to generate employment or that is more environmentally friendly would win. In August, the government submitted its 2004-2007 Plano Plurianual investment plan to congress, which calls for investing 191bn reais (US$65.9bn) on infrastructure, from waterworks to transport. Brazil's infrastructure and basic industry association Abdib has said that PPPs are the only way of guaranteeing infrastructure investment, while Fitch Atlantic Ratings has said that a relatively stable macroeconomic environment is needed for these partnerships to be successful. According to Fitch, other necessary factors include the development of legal parameters for concessions; defining bankruptcy procedures, including reparation for creditors; stable regulatory frameworks; and the development of a local capital market.