Over $12.6 bi lost after infrastructure works delayed in Brazil

The National Confederation of Industry (“CNI”) estimates that the losses incurred by the delay in six infrastructure projects devised as part of the government’s Growth Accelerated Program (“PAC”) amount to $12.6 billion. The data will be presented in a report to be delivered to the presidential candidates in July. According to CNI, the amount wasted is enough to build 466 thousand popular homes.

Among the projects analyzed are the airport of Vitória, the damming of the São Francisco River (whose delay has caused a loss estimated at $7.52 billion), and the transmission lines connecting the hydroelectric power plants of the Mandeira River to the National Interconnected System.

According to the Confederation, the delays were caused by recurring problems, such as the low quality of basic projects, the sluggish grant of environmental licenses and expropriations, and the poor management of the projects over time, with the overrating of benefits and underrating of deadlines and costs.

Among the solutions presented by CNI to cut the expenses stemming from the delays are the wider use of grants and partnerships between the government and the private enterprise, higher-quality licenses, the efficient inspection of companies that take part in agreements with aggressive price proposals, and the adoption of integrated hiring instruments in which the public administration contracts a private company to create a project and implement it.

Translated by Fabrício Ferreira