Brazil infrastructure: The way ahead

Sep 25, 2013

Investors remain skeptical that Brazil’s concession program for financing much-needed infrastructure projects will succeed where past attempts have failed

By Thierry Ogier

For as many years as poor infrastructure has been a drag on Brazil’s growth potential, authorities have sought to find solutions for it.

The latest such attempt, launched amid much fanfare over a year ago, set out to address the main bottlenecks in order to boost the competitiveness of the region’s largest economy.

But so far, the Programa de Investimentos em Logística (PIL), as the concession scheme is known, has barely got off the ground. The program has suffered delays due to regulatory concerns and uncertainty over the availability of financing.

Brazilian government officials nevertheless express confidence — perhaps unsurprisingly — that this time is different. The 180 billion real concession program aims to invest in roads and railways, ports and airports over five years.

A series of auctions are scheduled through next July. Large pension funds and public-sector banks will be able to support the winning consortia...

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