Spotlight: 2023 highway concessions in Brazil

Brazil has seen a large number of highway concessions in the last several years and this trend is likely to continue in 2023 under the presidency of Luiz Inácio Lula da Silva. 

Industry experts expect no major changes to the concession policy of President Jair Bolsonaro’s administration.

Land transport regulator ANTT operates 24 federal highways, totaling over 13,000km. Many are also operated by state governments.

“In Brazil we currently have just over 26,000km of highways operating under concession contracts and the projection for the next five or six years is that a similar volume, of 26,000km or 27,000km of additional highways, will be offered. We will double the number of highways under concession,” Marco Aurélio Barcelos, head of the country’s highway concessionaire association (ABCR), told BNamericas this month.

According to the infrastructure ministry (Minfra), seven highways have been awarded as concessions to the private sector since Bolsonaro came to power in 2019, totaling around 48.8bn reais (US$8.98bn) in private investments.

These concessions comprise stretches of the following highways:

Rodovia de Integração do Sul or ViaSul (BR-101/290/386/448/RS), Ecovias do Cerrado (BR-364/365/GO/MG, Via Costeira (BR-101/SC), Ecovias do Araguaia (BR-153/080/414/GO/TO), Via Brasil (BR-163/230/ MT/PA), Dutra (BR-116/101/SP/RJ) and EcoRioMinas (BR-116/493/465/RJ/MG).

Roughly 70 stretches with combined 8,400km in different states could see a simplified concession model with lower fees, according to a recent study about the highway concession potential, which was published by Brazil’s industry confederation (CNI).

The national transport confederation (CNT) has concluded that around 25% of the highways are currently in bad or dismal conditions.

The highway issue has gained importance in the transitional government's technical infrastructure committee. 

Named by Lula to the committee, Minas Gerais senator Alexandre Silveira said it will prioritize a diagnosis of the state of the country’s roads, in addition to looking at ways to revamp oversight bodies.

Silveira is a former head of the transport infrastructure department (Dnit), which is the authority responsible for maintenance and works on federal highways. 

"The goal of the Lula government is to recover investment capacity, generate income, employment, making the country attractive for investments, which is essential for economic growth and consequent improvement in the living conditions of Brazilians", Silveira said after his appointment.

The senator is being rumored as a potential infrastructure minister in Lula’s administration.

Here BNamericas takes a look at some of the main federal highways that could be offered to the private sector next year.

BR-381

The 297km highway runs from Belo Horizonte to Governador Valadares in Minas Gerais state. In a recent interview with BNamericas, infrastructure minister Marcelo Sampaio said that the concession will involve capex of 6bn reais.

The auction, whose bidding rules are under analysis by federal audit court TCU, was expected to be held this quarter. But with less than two months for the new government to take office, it is likely that the process will move into 2023.

In an interview with local daily O Estado de Minas before his victory in the presidential runoff vote, Lula said he would go ahead with the concession.

BR-040

ANTT is scheduled to open a public consultation for the BR-040 concession on Friday. The highway connects Cristalina in Goiás state with Minas Gerais’ capital Belo Horizonte.

The concession is expected to demand around 5.7bn reais in capex.

BR116/158/290/392

ANTT recently held a public consultation for the lot comprising the BR-116/158/290/392 highways in Rio Grande do Sul, totaling 674km.

The 30-year concession includes widening works, footbridges, marginal roads, implementation of third lanes, in addition to technological improvements.

BR-262

The 439km highway runs between the cities of Betim and Uberaba, in Minas Gerais.

The 30-year concession is expected to generate capex of 4.10bn reais and 4.08bn reais in opex.

In October, the infrastructure ministry approved studies by state-run firm Infra for the planned concession. The process still hinges on TCU approval and faces some resistance from Minas Gerais lawmakers as it involves widening works that are smaller than initially expected.

The concession contract was initially auctioned in 2013 but the concessionaire returned it to the government in 2017 as it had difficulties meeting the investment requirements.

OTHER PROJECTS

The ministry was planning to hold an auction this quarter to offer two of six highway lots in Paraná state. 

However, market conditions and the government transition could see the auction being held in 2023.

The six lots make up 3,328km and will require an estimated capex of 44bn reais.