Two returned Brazil concessions unlikely to be re-awarded before 2019

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Wednesday, September 13, 2017

The Brazilian government is unlikely to launch new tenders for two returned concessions before 2019.

Earlier this week, Invepar decided to return its concession for operating highway BR-040 after it failed to carry out planned investments. The 937km toll road connects capital Brasília with Juiz de Fora in Minas Gerais state, passing through Goiás state. The original contract required 702 km to be widened.

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In July, a consortium headed by Triunfo Participações e Investimento (TPI) and engineering firm UTC Engenharia decided to return their concession for operating Viracopos airport, in São Paulo state city Campinas, to authorities, as both are facing financial troubles and revenue and passenger traffic projections have not been met.

"With those returns, we need to follow certain bureaucratic steps to prepare those concessions to be offered once again. Those two concessions will likely be ready to be offered to investors only in 2019," Tarcisio Gomes de Freitas, projects secretary of the government's investment partnerships program (PPI), told BNamericas.

According to Freitas, despite the return of the concessions, the companies will be obligated to carry out maintenance on the highway and airport, avoiding any extra costs for the federal government.

"In my view, the return of those two concessions are isolated cases. I don't expect other cases in the near future," he added.