Change to Brazil's infra concessions could lead to new tenders

Brazil's federal government is reportedly planning a provisional measure that would give more flexibility to current airport, highway and railway concession contracts in the country.

The change would make extending contracts possible before ongoing concession agreements end. This is expected to have more impact in the railway industry, affecting local railway operators such as Rumo-ALL and MRS Logística, as well as local mining giant Vale, local paper Estadão reported.

Moreover, the measure will also likely permit the relaunch of tenders for concessions held by operators that are having difficulties maintaining their contracts.

This is expected to the greatest effect in airport and highway contracts, as concession-holders in these two sectors have been the badly hit by the federal police's Lava Jato corruption investigation, according to the report.

For instance, Singapore airport operator Changi is mulling the possibility of a new partner for its concession of Rio de Janeiro's Galeão international airport. Its current partner is Odebrecht Transport, part of local construction group Odebrecht, which has been forced to sell assets in the wake of problems stemming from the graft investigation.

If no further doubts on the matter are brought up by the beginning of this week, the provisional measure is expected to be published in the federal government's official gazette by Friday (Nov. 15).