Brazil seeks to privatize, pave Trans-Amazonian Highway

by Reuters
Wednesday, 23 January 2019 00:46 GMT

(Recasts lead paragraph)

By Jake Spring

BRASILIA, Jan 22 (Reuters) - Brazil will add the Trans-Amazonian Highway to the list of projects for privatization, its infrastructure minister said on Tuesday, seeking new investment to pave parts of a dictatorship-era roadway already blamed for extensive deforestation.

The government also plans to sell to investors a concession to run BR-163, a key northern route for shipping Brazilian grains, adding it along with the Trans-Amazonian to a priority list for privatization at a meeting next month, Infrastructure Minister Tarcisio Freitas told Reuters in an interview.

President Jair Bolsonaro's government is seeking to overhaul Brazil's poor transportation infrastructure, which raises costs and causes delays for the commodity-exporting powerhouse, by seeking private investors to operate dozens of road, rail and airport projects.

On Monday, government Secretary Adalberto Vasconcelos, who has been tasked with creating public-private infrastructure partnerships, said the country would privatize more airports and secure new investment for railways.

For roadways, five concessions are slated for auction this year with a long pipeline of projects to follow, according to Freitas. BR-262/381 in the state of Minas Gerais, sometimes called the "Road of Death" because its poor condition has contributed to lethal accidents, will also be put on the privatization list next month, he said.

The Trans-Amazonian highway, officially known as BR-230, was inaugurated in the 1970s under Brazil's military dictatorship, but only a fraction of its nearly 3,000 kilometers (1,864-miles) were paved and much of the existing roadway has fallen into disrepair. It stretches from the coastal state of Paraiba deep into Amazonas state. Original plans for it to reach the border with Peru were never completed.

Nevertheless, research by Brazil's space agency and academics has linked the road to a rise in deforestation, and road improvements allowing easier access deep into the Amazon have consistently led to increased deforestation nearby.

Freitas did not elaborate on whether the country would seek to privatize all or part of the Trans-Amazonian.

He said that major construction firms that were implicated in corruption schemes remain unable to participate in public auctions for infrastructure projects, but could act as subcontractors for winners of concession auctions.

Engineering conglomerates implicated in corruption schemes to fix contracts include Odebrecht SA and Andrade Gutierrez SA, with those companies signing leniency deals with the government admitting guilt and agreeing to cooperate.

"They are companies that have know-how, companies with engineering (ability), companies that can provide good services," Freitas said.

(Reporting by Jake Spring; editing by Lisa Shumaker and Bill Berkrot)

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