Second Life in PPPs for Failed Concessions: Rousseff

Brazilian infrastructure concessions that fail to attract bids at auction could be offered as public-private partnerships instead, President Dilma Rousseff told investors in New York Wednesday. Rousseff made particular reference to the BR-262 project in Minas Gerais and Espirito Santo that was auctioned earlier this month without a single bid. “Initially, the investors believed it was viable, but they later began to worry about the amount of the toll. We’re reviewing if this needs to become a PPP, or whether it will be a public project,” she says. Brazil has struggled to encourage infrastructure investment, despite its announcement last year of a BRL133bn ($66bn) investment program. Brazil had increased credit, kept spending under control, and was committed respecting institutions and contracts, she said. BNDES President Luciano Coutinho told the same audience that Brazil needed the private sector project financing to step in to “share the burden, because the BNDES is already overburdened.” Coutinho highlighted the potential of infrastructure bonds, and the need for a deepening of the domestic capital markets. To this end, he says 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. Rousseff and Coutinho spoke at the Brazil Infrastructure Opportunity seminar in New York Wednesday.