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Partnership with private sector should improve economy and service delivery in Brazil

PPI

Package of concessions and privatizations is a symbol of economic advancement, job creation and improvement in the delivery of consumer services

Improve the quality of services provided, increase the number of jobs and make the economy grow more sustainably. These are some of the objectives of the Brazilian government to pass on part of the operation and maintenance of the country's infrastructure sectors. In this sense, investors are being attracted to the 57 projects that are part of the Investment Partnerships Program (PPI).

A practical example of the attractiveness of these assets and how the project can leverage the Brazilian economy after two years of recession are the recent government auctions. Only in electric energy auctions and in the oil and gas sector were collected almost R $ 16 billion in granting bonuses.

These funds enter directly into the National Treasury coffers and help Brazil's government aim to rebalance public accounts, eliminating the need to take more bitter measures, such as raising taxes.

In the evaluation of José Carlos Medaglia, director-president of the State Planning and Logistics Company (EPL), which produces studies that base the concession projects, the partnership with the private sector is an important tool to generate development in periods when the Union can not afford the costs of high investments in infrastructure.

" The lack of infrastructure that the country needs requires measures that give us effective and faster responses. In this scenario, also taking into account some budgetary difficulties of the government, I think it is almost a consensus that concessions, the public-private partnership, is a path to be traced, "he said.

Methodology

For some experts, the attractiveness of Brazilian projects in infrastructure has attracted the attention of investors due to a less interventionist and more transparent modeling. Commenting on the success of the four hydroelectric dams auction, which raised R $ 12.13 billion, Tyhmos Energia's director, Thais Brandini, highlighted the competition of the competitors and the change in the business model of the concessions.

" We see success near what we had. When the government shapes the auction in a way to attract investors, they come. This model is more interesting, there were more interested ", he pointed out. Similar position has the EPL director. For him, the projects are attractive and the new modeling of the concessions, which does not try to impose a rate of return on investors and gives them time to prepare, has generated positive effects.

" This is a sign that he was right in that modeling, in that offer. This ensures that we have a good level of service, "he said, giving as an example the auction of four airports (Salvador, Fortaleza, Porto Alegre and Florianópolis) this year.

services

While helping the economy grow on the basis of infrastructure investments, concessions can mean a substantial improvement in the quality of service provided to the population.

" Concessions in road infrastructure offer greater safety and mobility on the roads. When the truck transits on a better signposted road, with adequate pavement, the truck driver consequently reduces tire costs, maintenance of the vehicle, among other inputs, "said the president of the Brazilian Truckers' Association (Abcam), Jose da Fonseca Lopes.

For him, Brazilian highways are famous in their poor state of conservation. In view of the entity, the concessions have managed to change, which, in the end, improves the Brazilian economy. "The road modal is fundamental to leverage the country's economic development," he concludes.  

Economic impact

The partnership with the private sector generates cash for the Brazilian government, and leverages jobs - especially in construction - and results in the generation of more income and wealth. For Medaglia, the impacts are positive. 

"The construction sector is the fastest and most responsive to the generation of employment, so investment in a highway, an airport project ... can give a very favorable equation in terms of job creation, economic dynamics and tax return, "he said. 

For Thais Brandini of Thymos Energia, the upcoming energy business is a symbol of that. "It's a positive impact, which makes the economy grow, grow jobs," he said. Given the recent auctions in the area, she expects a promising future for the projects that the Brazilian government presented to private investors. 

Source: Portal Brasil, with information from ANP , Aneel  and Projeto Crescer