Since Michel Temer came into power in August 2016, Brazil has witnessed 44 auctions in the infrastructure sector have been conducted. All these auctions are expected to bring in R $ 23 billion worth of investments for infrastructure development.The Brazilian government intends to auction 18 infrastructure projects by the end of the second half of 2017 according to Tarcisio Gomes de Freitas, secretary of the Investment Partnerships Program (PPI). The government is expected to work with the private sector on these projects, therefore, new players are encouraged to participate in the process. Felipe Montoro Jens, an infrastructure projects expert, says that the government reports it will do this despite the current political changes taking place.
Courting the Private Sector
The auctions are aimed at increasing the productivity of the country by expanding and modernizing the infrastructure sector. It is important for the country to break the cycle of driving away investors which has contributed to increased unemployment rates in the country. Consequently, Freitas indicates that the country cannot be held hostage by the fiscal budget hence the need for the auctions. To make the whole process a success, the government has worked on bringing projects that are attractive to the private sector as was the case in the past with the transmission lines project, one that is considered the largest in the country’s history.
The government has also worked to ensure a series of mistakes it made in the past are not repeated. It has, therefore, made it clear to investors and the private sector that it is now pro-business and not anti-business as it had been perceived in the past. This comes in the wake of some concessions in the past left a bad taste in the mouth of foreign investors who have, however, now made their way back to the country. International consortia are expected to participate in the coming auctions.