COVID-19: Brazil subway, highway operators make urgent call for financial support

Concessionaires and companies operating subways and highways in Brazil are demanding urgent measures from the government to compensate for financial losses caused by the coronavirus. 

The country´s railroad passenger carrier association (ANPTrilhos) says circulation restrictions in several states to halt the spread of COVID-19 have caused a drastic drop in passengers. 

Since the restrictions were imposed last week by state governors the number of passengers using subways dropped nearly 80% and has already led to a revenue reduction for companies of 271mn reais (US$54mn), according to ANPTrilhos. 

“We expect, at least, the federal and state governments to give the public transport sector on rails the same treatment that has been given to the airline sector," an ANPTrilhos spokesperson told BNamericas.

BNDES SUPPORT 

The government recently unveiled measures to help airline and airport concessionaires in order to mitigate the sharp decline in passengers. 

So far these are the only concessionaries in the infrastructure sector that have received government support. 

Among the measures demanded by ANPTrilhos are more financing and faster loan approvals from Brazil’s largest development bank, BNDES, to support subway operators’ cash flow, and tax exemptions for a limited period. 

The unprecedented crisis generated by coronavirus and its economic impact have prompted several business sectors to call for government support and in terms of infrastructure concessions, legal experts are expecting a series of demands in the coming months from investors and operators to review existing contracts.

HIGHWAYS 

The circulation restrictions are also impacting revenues at highways operators. 

On Tuesday, Fitch Ratings conducted a portfolio review of Brazilian toll roads and urban railway operators.

The review, which resulted in certain rating downgrades, took place "amid the current challenging scenario of the coronavirus pandemic and the expected sharp drop in traffic volume and revenues caused by commuting restrictions, lock-downs and depressed economic activity," said the rating agency.