Brazil's senate approves US$750mn transport sector bailout

Bnamericas Published: Thursday, November 19, 2020
Brazil's senate approves US$750mn transport sector bailout

Brazil’s senate approved a bailout package of 4bn reais (US$750mn) for subway, railway and bus operators, which have been impacted by measures to tackle COVID-19. 

The financial aid, already approved by the lower house, now only needs final approval from President Jair Bolsonaro. The funds will be sent to operators via local governments after being released by the national treasury, according to a senate press release. 

Companies have been demanding the rapid approval of the bailout as the financial situation of many operators is deteriorating. 

"The financial crisis in the subway sector is getting worse every day and operators no longer have the resources to maintain the service," said Joubert Flores, president of Brazilian passenger transport association ANPTrilhos, in a statement.

"All possible adjustments have been made and the approval of emergency aid is a relief for the continuation of public transport services." 

Train and subway companies saw a 47% fall in passenger numbers in the first nine months of the year from the same period 2019, according to ANPTrilhos, which added that so far this year, subway, urban train and light rail systems have accumulated a deficit of 7bn reais. 

According to sector observers, mass transportation in Brazil will likely take several years to recover from the impact of COVID-19, even with a successful vaccine, as there has been a transformation in people’s behavior during the pandemic, and the home office model is likely to persist. 

BNamericas explored the trend in our intelligence series report Will Urban Transit Ever Be the Same Again?

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