Roads: Brasilia will reduce investment demands on road concessionaires

Brasília will reduce investment demands on road concessionaires

By André Borges São Paulo
The government’s decision of suspending an increase in prices of federal roads’ tolls will have a direct impact in the infrastructure of each of these highways. Valor has learned that the National Agency of Land Transport (ANTT) has already started talks with concessionaires with the goal of assessing their annual investment commitments. Since the government suspended increases that are set in the contracts signed with the concessionaires, it was decided that this loss will be compensated with the reduction of investments that were planned. Less work and intervention in roads means more money in the companies’ cash.
The information was confirmed to Valor by Transport Minister César Borges. He said the government has decided to abandon two other solutions that could be adopted to pay for the no-hike bill. First, it was considered the possibility of increasing the timespans of road concessions. Thus the government would dilute the impact of the increase suspension, giving more time to companies to explore commercially the highway. The second option would be a direct payment from the government to settle the account with concessionaires. But withdrawing Treasury money was entirely ruled out. “We will not do either of those things. The government will not lengthen the contract nor will it pay from its own pocket, there’s no margin for that,” Mr. Borges said.
Mr. Borges said the financial impact of this decision is yet to be calculated. The federal suspension of toll increases was announced at the end of June, soon after the São Paulo state government declared it wouldn’t raise the price of tolls for state roads. 
According to ANTT’s timetable, at least three federal concessions would have toll increases next month: Nova Dutra, Rio-Niterói Bridge and Rio de Janeiro-Juiz de Fora. The two first are CCR concessions and the third is managed by Concer, which is controlled by Triunfo. A second block of concessions has toll hikes scheduled for the last quarter.
“We are talking to all concessionaires. What we want to ensure previously is that there will be no breach of contract. Companies will have their financial commitments honored,” said Jorge Bastos, ANTT's general director.
The government is mainly concerned at this moment with avoiding any type of measure that can risk its package of new concessions. In this second half, 7,500km of roads and 11,000km of railways will be auctioned. The macroeconomic environment is not very favorable and investors have been reacting with caution to government announcements. Getting into a  collision rout with current concessionaires would only add to the scenario of complications.
There are currently 15 federal road concessions, in a total of 11,200km. Toll increases happen once a year. The fare is the sole source of remuneration of concessionaires.

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