Toll Roads and Airport Projects As Their Request for Proposal (RFP) Processes Are in a More Advanced Stage
The Brazilian Infrastructure: It’s “Now or Never” From an Economic Growth Constraint to a Plethora of Opportunities July 29, 2013 It’s “Now or Never.” If Brazil’s infrastructure bottlenecks were concerning before, they have only gotten Research Analysts worse. Over the past ten years, while the Brazilian economy enjoyed prominent growth leveraged by the exhaustion of the model based on credit, consumption, and commodities (the "3 Cs"), transportation Bruno Savaris, CFA infrastructure investments accounted for just ~0.6% of GDP, i.e., less than half of what would be required 55 11 3701.6332 bruno.savaris@credit–suisse.com to sustain annual economic growth of 4.5%. Now that the 3Cs economic model is running out of steam, the Brazilian government has shifted towards addressing concerns about meager economic growth by laying Felipe Vinagre the groundwork to solve one of its biggest problems: the lack of adequate infrastructure. 55 11 3701.6333 felipe.vinagre@credit–suisse.com Mindful Government but Ineffective Alone. While the federal government seems highly committed to delivering on the ~R$240bn investment plan announced in 2H12, the execution challenge cannot be Daniel Magalhaes 55 11 3701.6124 understated, as most projects are still in the analysis stage and execution of public investments has proven daniel.magalhaes@credit–suisse.com inefficient, to say the least. Thus, the private sector has to be involved. Accordingly, the government has implemented several changes to the regulatory framework for ports, railroads, highways, and urban mobility to make the rules sufficiently clear to foster private investments. To put things into perspective, over the past ten years some R$52bn in projects were granted to the private sector.
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