São Paulo governor dangles US$5bn infra carrot

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Thursday, October 2, 2014

São Paulo, Brazil's most affluent state, will invest 12.8bn reais (US$5.16bn) in transportation infrastructure and basic water and sanitation works next year, governor Geraldo Alckmin has promised.

Alckmin is the incumbent in this Sunday's election.

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The sector most likely to see the largest investment increase year-on-year under the state government's 2015 proposed budget is transportation infrastructure. A total of 8.2bn reais has been earmarked for works such as subway and railway construction, local daily O Estado de S. Paulo reported.

Some of the investment will go toward work on existing lines of São Paulo city metro company CMSP. A total of 1.1bn reais has been assigned to subway line No.5 while monorail lines No.15 and No.17 are earmarked combined investment of 1.2bn reais

Another 1.3bn reais is destined for three new lines, namely subway line No.6, monorail line No.18 and a regional train linking state capital São Paulo to Campinas city some 90km to the north, the report said.

Investment will also go toward work managed by local rail company CPTM. Among the projects is the start of construction of line No.14, a 12.2km line to link downtown São Paulo to Cumbica airport in the city of Guarulhos.

With 7.3bn reais in spending so far in 2014, next year's transportation infrastructure budget is approximately 12.3% higher. When considering inflation of about 5.8%, the actual rate of investment increase is 6.5%.

As for basic water and sanitation, next year's proposed budget is 4.6bn reais, up 7% from 4.3bn reais this year. Taking into account inflation, the increase is 1.2%, according to the report.

Although details of the waterworks investment were not given, state water utility Sabesp earlier this year outlined an 826mn-real 2014-15 emergency investment plan to help address the current water shortage problem in the state.

The biggest single slice of funding, 504mn reais, is for a project to interlink the Paraíba do Sul river basin in Rio de Janeiro and Minas Gerais states with São Paulo state's Cantareira water supply system.

BNamericas will host its 5th South America Infrastructure Summit in Colombia on October 22-23.