Rio Grande do Sul state readies prison PPP

Brazil's Rio Grande do Sul state is planning to hold an auction in July to offer a prison PPP contract.

It will involve construction, operation and maintenance of a prison complex in Erechim municipality, the state government said in a press release.  

The complex will have two units for up to 1,200 inmates when it is fully operational and will demand a construction investment of 150mn reais (US$30mn), and 50.5mn annually for maintenance of each unit.

The PPP contract will have a duration of 30 years and construction is expected last up to 24 months. 

The winner will be the company that demands the lowest financial contribution from the state.

The state published the first tender notice for the prison PPP in July last year with the auction scheduled for September, but it was suspended due to lack of interest. After this it conducted a market survey to improve the conditions for the private sector. 

The PPP was structured with the help of federal development bank BNDES and the Inter-American Development Bank (IDB).

BNDES is looking to support states to structure more PPPs and concessions that have a positive social impact. 

“The portfolio of projects being structured by BNDES includes public safety, within what we call social infrastructure,” the bank’s project planning and structuring director, Nelson Barbosa, said in a separate press release.

The tender notice can be seen via this link.