Brazil plans to make further strides in privatization

Brazil’s Minister of Infrastructure Tarcísio Gomes de Freitas said Thursday (Apr. 3) that the Brazilian government plans to hand over to the private enterprise as many assets as possible, arguing that there is no room in the federal budget for the necessary investment in infrastructure.

Of the $14.5 billion assigned for contracts at the National Department of Transport Infrastructure, Freitas said, the government has only $2.08 billion—of which $1.56 billion is earmarked for investment and $520 million for the payment of interest in the public debt.

“We have a huge fiscal problem today and this may be the great difficulty in infrastructure—lack of resources. We’ve been working with budgets that are way below our needs,” the minister said during a public hearing in the lower house.

Assets must be transferred, he went on to say, “because loans are not available. In our perspective, we must pass along to the private enterprise whatever it is capable of managing.”

Auctions

Gomes de Freitas also mentioned airport auctions, port terminals, and the North-South Railway, held in March. He pointed out that an auction is slated to take place Friday (5) with concessions for six ports in Pará state. The government expects that the terminals, good for the transport of fuel, receive investments adding up to $112 million.

While talking about the new concessions, the minister argued Brazilian does not sell any assets, but rather “credibility,” and that the ministry works to come up with a successful contracting model to prevent contract non-compliance and the suspension of investment.

International investors, he went on to add, want to invest in the country, but they expect regulated business conditions with legal security, because “foreign investors’ biggest fear—and what has kept them away—is the risk of default. They’re afraid to lose capital.”