Upcoming highway concessions total 1,750km

Friday, March 23, 2012

Upcoming highway concession projects in Brazil will cover 1,750km of roads in four states, according to Paulo Resende, head of infrastructure and logistics at the Fundação Dom Cabral business school.

Concessions are due to be awarded for highways BR-040 and BR-381 in southeastern Minas Gerais state and BR-101 in the neighboring state of Espírito Santo. Tenders are also planned for BR-116 in the northeastern state of Bahia and BR-470 in southern state Santa Catarina.

"Although investments amounts have not yet been defined, President Dilma Rousseff has already instructed the transport ministry to concession the highways. Tolls will be set higher than the last federal highway package," Resende said during a webcast organized by New York-based consultancy Gerson Lehrman Group (GLG).

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Likely bidders for the projects should include CCR (Bovespa: CCRO3) and OHL Brasil (Bovespa: OHLB3). Although local firms have the technological capacity to operate the roads, external capital support is essential, the expert said.

Brazil has 1.7mn kilometers of road, with around 14% of the paved road network considered to be in good condition.