New Minister of Transport says government will study the use of PPPs for rail projects

The Minister of Transport, Renan Filho, confirmed this Tuesday (3rd), that the government will study the use of public-private partnerships (PPPs) for new railway projects. The Broadcast (Grupo Estado’s real-time news system) showed in a report published last month that the path would be analyzed by the Lula administration, given the strong need for resources to survey railway routes.

“What is new is that if we have budgetary conditions to carry out PPPs, the government contributes a piece, even a small one, 5%, 3%, 8%, of a project already helps”, said Renan Filho to journalists after inauguration ceremony.

He highlighted that he will also await the discussions of the new fiscal framework to analyze and organize the investment capacity that the portfolio will have to inject in the sector.

“Commitment number one is to finish railways that are running. For new large projects, mainly public-private railways. For the conclusion of existing projects, there may be allocation of public resources, the commitment of this government is to finish all the public works in progress”, explained Renan Filho.

“For new projects, obviously due to fiscal and budget restrictions, it is necessary to attract private capital, but we will have these conditions, dialoguing with the world in a respectful way, respecting the environment, democracy”, he said, highlighting the need to bring investments from abroad, and a segment that is “tope” to receive a return in 30 or even 50 years.

“When talking about railroad concessions, they are multi-billion-dollar projects, which society invests resources in order to have a return in 30, 40 years, sometimes 50 years. People only do this if they have legal security, legal guarantees. Brazil has already taken steps in this direction, but it needs to take others”, said the minister, who mentioned the need to make efforts to reduce to zero the importance of the road modal in the transport of grains and ores, transferring this role to the railroads. “The international experience shows that the best path is through PPP, and not through the use of public resources because they are scarce, and the railroads require a lot of resources”, he reinforced.

He also confirmed that the government should maintain the design of the new Infra SA, a state-owned company that emerged from the incorporation of EPL and Valec – the latter responsible for building railroads with public funds.

Questioned whether the PPPs could be used for routes that are already under construction with cross-investment, such as Fico and Fiol, Renan Filho said that he would need to look at the contracts on a case-by-case basis. “But cross-incentives are practices used in many places, you need to check the best ways. Let’s listen to everyone, ”he completed.

highways

The Minister of Transport also stated that there is a possibility for the government to study the rebalancing of highway concessions in the process of being returned by companies. He pointed out, however, that this hypothesis will be analyzed on a case-by-case basis, because there are only chances of rebalancing when there is no breach of contract by the concessionaire.

“There is a possibility, but we need to observe case by case, because there is only possibility of rebalancing the contract if we observe that there was no breach of contract, that there was an original error. That’s why these issues cannot be discussed in a general way, which is a speech by the minister saying ‘look, I’m going to do this and that’ is not always well interpreted”, he replied. “Contract, in general, is fulfilled, in a specific way. Evaluate what happened. But then you have to look: is it in the administrative sphere? Is it in the judicial sphere? Was there a court decision? All of that matters at decision time.”

The Via-040 (BR-040), MS Via (BR-163/MS), Concebra (BR-060/153/262), Autopista Fluminense (BR-101/RJ) are in the “friendly return” queue ), the Western Route (BR-163/MT), the Steel Highway (BR-393). When a company triggers the return, the asset is put up for auction again in the future. The minister indicated, however, that he could evaluate the possibility of, in some cases, the contract being rebalanced.

Renan Filho also said that he is an “extreme defender of the fulfillment of contracts”. “When non-compliance is private, there is greater leniency on the part of society and also the press. We need to demand compliance with contracts side by side, only then will the country offer more legal security for people to put billionaire projects on their feet”, he said.

He also reinforced that he intends to continue with the “total calendar” of concessions organized by the Bolsonaro government. He noted, however, that the new government will analyze the projects first.

“President Lula has already said it and I would like to repeat it here, we are not going to let anything stop in Brazil, our intention is exactly to put in motion what is stopped and what is moving nothing stops. Nothing stops in Brazil, our intention is to put to work what is stopped and what is moving, let’s take a look, revisit, observe the nuances of each issue, but move everything forward. Obviously we will check to see the best way, ”he said.

first 100 days

Also questioned about the plan for the first 100 days that he must present within two weeks, the minister replied that he will list through this commitment which works he will resume, which undertakings will be accelerated and which deliveries will be made, for example.

“How are we going to act in an emergency, what are we going to do to deal with the flow of the agricultural crop that is ready to be sold in the next three months, what are we going to do in the rainy season, this is what society wants to hear and what it is the role of the ministry, to say what it is going to do to people”, he stated.