World Cup, Olympics accelerating PPPs at state level

Friday, September 9, 2011

Brazil's preparation for the 2014 World Cup and the 2016 Olympics is accelerating the accomplishment of public-private partnerships (PPPs) in various states, according to attorney José Virgílio Lopes Enei of the Machado Meyer law offices.

"The World Cup and Olympics are making a difference in terms of PPPs as they are pushing the need to meet deadlines," Enei was quoted as saying in a report by local paper Folha de São Paulo.

Some of the states to highlight are Minas Gerais, Bahia, Pernambuco, São Paulo and Rio de Janeiro.

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Since a legislative change in 2004 to stimulate PPPs, 18 have been created, most of them recently created and at the state level, the report said.

One noteworthy project is the Porto Maravilha port area revitalization project in the city of Rio de Janeiro, which is currently underway. The project could reach some 8bn reais (US$4.79bn) in investments and includes urban transportation and basic sanitation works, among others.

In terms of water, the attorney highlighted a partnership between São Paulo state water utility Sabesp (Bovespa: SBSP3, NYSE: SBS) and CabSpat, a company formed by Galvão Engenharia and CAB Ambiental.

The 15-year PPP, budgeted at 300mn reais, entails the expansion of the Alto Tietê integrated water production system.

The only PPP closed at the federal level over the last seven years is a data center for federally controlled banks Caixa Econômica Federal (CEF) and Banco do Brasil (BB) located in Brasília.

Three irrigation PPPs and a satellite system project are currently at the feasibility level, according to the report.