Brazil’s Rousseff moots PPP approach for failed concessions
A Brazilian road concession that failed to attract investor interest could be repackaged as public-private partnerships, Dilma Rousseff, the country’s president, says
Brazilian infrastructure concessions that fail to attract
bids at auction could be offered as public-private partnerships
instead, Dilma Rousseff, the country's president, told
investors in New York Wednesday.
Rousseff made particular reference to a road concession
project that was auctioned earlier this month without a single
"Initially, the investors believed it was viable, but they
later began to worry about the amount of the toll - for the
region, and the amount of the toll," Rousseff said. "We're
reviewing if this needs to become a PPP, or whether it will be
a public project."
A concession for Brazilian highway BR-262, which runs
between Espirito Santo and Minas Gerais provinces, received no
bids when it was auctioned earlier this month.
Brazil has struggled to encourage infrastructure
investment, despite its announcement last year of a 133
billion real ($66 billion) investment program.
Rousseff attempted to reignite enthusiasm in the speech to
investors on Wednesday.
Addressing a packed auditorium in New York - which included
private equity, pension funds, real money accounts,
multinational firms and dedicated infrastructure funds - she
highlighted the country's advances in recent years.
Brazil had increased credit, kept spending under control,
and was committed respecting institutions and contracts, she
The comments came after Luciano Coutinho, president of
Brazil's state development bank BNDES, told the same audience
that the country needed the private sector to step in to "share
the burden, because the BNDES is already overburdened".
The country's banks, asset managers, pensions would also be
needed, as well as foreign sources, he said.
Coutinho highlighted the potential of infrastructure bonds,
and the need for a deepening of the domestic capital markets.
To this end, he said BNDES is trading more bonds in the
secondary market, and wants to create a temporary fund to trade
bonds with the aim of stimulating liquidity.
"We will need the market to help us finance infrastructure,"
Coutinho said, while noting "the BNDES will retain an important
role" in supplying funds, particularly at longer tenors.
Rousseff and Coutinho spoke at the Brazil Infrastructure
Opportunity seminar in New York Wednesday. LF
See also: "
The problem with Brazil", and "
Brazil infrastructure: The way ahead" in