SESSION 4 – INFRASTRUCTURE · Law No. 8,666/93 (Bidding Law:) Regulates art. 37, item XXI, of the Brazilian Federal Constitution; establishes rules for bids and contracts of the

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SESSION 4 – INFRASTRUCTURE

Mauricio Endo


Population(1)

208 million‘

Coastline7,367 km

Risk Brazil (S&P)BB

GDP per capitaUSD 9,490

(1) Oxford Economics estimative for 2017;Source: Oxford Economics Database, Reuters and CIA Factbook

Regionalization of the Brazilian GDP(Presented in %)

North RegionGDP 5.3%

Northeast RegionGDP 13.9%

Southeast RegionGDP 54.9%

Midwest RegionGDP 9.4%

South RegionGDP 16.4%

Area8,515,767 km²

GovernmentPresidential Republic

GDP 2017USD 1.969 trillion

Country Overview


According to the Global Competitiveness Index (GCI) Infrastructure quality ranking of WEF in2017 - 2018, Brazil ranks 73th out of 137 countries. The ranking evaluates:

- The extent and efficiency of the transportation infrastructure capable of providing easy and safemovement of goods, services and people in airports, highways, railways and ports.

- The power supply quality, free of interruptions and faults.

- A solid and extensive telecommunication network that allows a fast and free flow ofinformation.

Source: WEF.

6,3 6,0 5,75,3

4,8 4,74,3 4,2 4,1 3,9 3,8 3,8

Japan UnitedStates

Canada Australia Chile China Mexico Worldmedian

Brazil Argentina Peru Colombia

4th 9th 16th 28th 41st 46th 62nd 69th 73rd 81st 86th 87th

Quality of Infrastructure in Brazil (1)


Highways - 103rd place in 137 countries

6,15,7 5,4 5,2

4,8 4,6 4,4 4,13,3 3,1 3,0 3,0

Japan UnitedStates

Canada Chile Australia China Mexico Worldmedian

Argentina Brazil Peru Colombia

6th 10th 22nd 24th 35th 42nd 52nd 69th 96th 103rd 108th 110th


Source: WEF.


Airports - 95th position in 137 countries

6,0 5,9 5,65,2 4,9

4,5 4,4 4,3 4,2 4,1 4,1 3,9

UnitedStates

Canada Japan Australia China Chile Mexico Worldmedian

Argentina Colombia Peru Brazil

9th 12th 26th 36th 45th 62nd 67th 69th 78th 81st 85th 95th


Source: WEF.


Railways - 88th place in 101 countries

6,6

5,54,9 4,8

4,13,3

2,8 2,52,1 2,0 2,0

1,5

Japan UnitedStates

Canada China Australia Worldmedian

Mexico Chile Argentina Peru Brazil Colombia

2nd 10th 16th 17th 35th 55st 65th 74th 83rd 87th 88th 96th


Source: WEF.


Ports - 106th position in 137 countries

5,85,4 5,3

4,9 4,9 4,6 4,3 4,1 3,8 3,7 3,73,1

UnitedStates

Canada Japan Australia Chile China Mexico Worldmedian

ColombiaArgentina Peru Brazil

9th 19th 21st 35th 36th 49th 62nd 69th 77th 80th 83rd 106th


Source: WEF.


Eletricity and telephony infrastructure – 72nd position in 137 countries

6,66,0 5,8

5,4 5,44,6 4,5 4,4 4,4 4,3 4,3 4,1

Japan UnitedStates

Canada Australia Chile Worldmedian

Brazil Peru ColombiaArgentina China Mexico

5th 18th 31st 41st 43rd 69th 72nd 75th 76th 79th 80th 84th


Source: WEF.


Law 13.097 of 2015

Law 13.173 of 2015

Law 11.479 of 2007

Law 12.349 of 2010

Law 8.666 of 1993 –

Biddings Law

Law No. 8,666/93 (Bidding Law):Regulates art. 37, item XXI, of the Brazilian Federal Constitution; establishes rules for bids and contracts of the Public Administration.

Law No. 8,987/95 (Concession Law): Provides for the regime of Common Concession (non-subsidized concession) and permission of the provision of public services provided in art. 175 of the Brazilian Federal Constitution.

Law No. 11,079/04 (PPP Law): Provides for the contracting of Public-Private Partnership (subsidized concession) within the scope of public administration.

Law 8.987 of 1995 –

Concessions Law

Law 11.079of 2004

Law of PPPs

Contract Legal Framework


Regulatory Agencies

Power

Telecommunications

Transport

Civil Aviation and Airports

Waterway and Ports

Water


1995 2007 2012 2013

HIGHWAY CONCESSION: BR - 040 Juiz de Fora –

Rio de Janeiro BR – 116 – RJ Paraíba -

Teresópolis

PRIVATIZATION: TELEBRAS (Telecommunication) ELETROBRAS (Distribution) EMBRAER (Aircraft) VALE (Mining)RAILWAY CONCESSION:• RFN (Federal Railway Network)

HIGHWAY CONCESSION: BR 290/ RS (Osório- Porto Alegre) RAILWAY CONCESSION: Northeast’s Rail

Network

HIGHWAY CONCESSION: BR-116

Bahia

HIGHWAY CONCESSION: BR 101 ES AIRPORT CONCESSION: Brasilia Airport Guarulhos

Airport Viracopos

Airport

HIGHWAY CONCESSION: BR-050 MG – GOAIRPORT CONCESSION: Galeão Airport Confins Airport

1996 1997 1998 2009 2017

HIGHWAYCONCESSION: BR 116/ RS RAILWAY CONCESSION: São Paulos’s Rail Network

HIGHWAY CONCESSION:

Régis Bittencourt fernão Dias BR-101 RJ- ES Rio-Niterói Bridge Transbrasiliana Steel Road

HIGHWAY CONCESSION: Florianópolis’ Airport Salvador’s Airport Fortaleza’s Airport Porto Alegre’s AirportPORT TERMINAL CONCESION: 2 Ports terminals :

Santarém and Rio de Janeiro WheatTerminal

Timeline of Federal Privatization and Concession in Brazil

Presenter

Presentation Notes

http://www.cuitegiemfoco.com/2013/11/de-collor-dilma-veja-o-que-cada.html


Investiments trough Concessions (US$ Billion)

Private investments added up to more than US$ 500 Billion from 1990 to 2016

192178

4936

2816 15 12

Pow

er

Tele

com

Hig

hw

ays

Rai

lway

s

Air

po

rts

Wat

er

Gss

Port

s

Source: World Bank


Source: Diário Oficial da União. Elaboração GO Associados.

54.5

25.022.0 20.7

15.8

8.44.6

Transport Urbanization Sanitation Solid Waste Health Housing Others

PPP contracts investments added up to more than BRL145 billion (US$ 40 billion) since 2015

Investments trough PPPs (BRL billion)


Source: ABDIB.

1,51,7

1,8 1,8 1,82,0

2,2 2,3 2,3 2,4 2,4 2,4

2,1

1,71,5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Need for investment: 5%

Note: Includes Energy, Transportation, Sanitation and Telecommunications. Oil and Gas not included. 2017 = Forecast

Inv. Infra (% GDP)

Investments in Infrastructure in Brazil (2003-2017)


Annual Infrastructure Investments in developing countries as % of GDP

Source: ABDIB, World Economic Forum, Credit Suisse e International Institute for Management Development.

13,4%

6,2% 5,8%

2,1%

China Vietna Chile Colombia India Filipinas Brasil

11,4%

4,5%3,6%

Infrastructure investments in other countries


Total investment need forecast for Brazil 2018-2038(US$ billion)

Source: GIHub

1.005

518

380

253174 171

10751

Infrastructure investment needs for the next 20 years add up tomore than USD 3 trillion in Brazil


PPI – Investment Partnership Program (Law 13.334/16)

Investment Partnership Program (PPI – Programa de Parcerias de Investimento), also named as Growth Project or “Avançar Parcerias” to incentivize and increaseprivate investment through Privatization, Concessions and PPPs

PPI To define:• The long term federal policies for

the investments in federal publicinfrastructure trough partnershipsand privatizations

• The federal public infrastructureprojects/assets qualified for thepartnerships and the strategicguidelines for structuring, tendering and contracting

• The federal policies to supportpartnerships in publicinfrastructure projects/assets in States, Federal District (Brasilia) and Municipalities.

PPI Objective:• Expand opportunities for investment

and employment• Ensure the expansion and quality of

public infrastructure• Promote full and fair competition for

the partnerships• Ensure stability and legal certainty,

guaranteeing minimum interventionin business and investments

• Strengthen the regulatoryenvironment and the autonomy ofregulatory agencies

• Encourage Privatization, Concessions and PPPs (Public-Private Partnerships)


Airport

4 International Airports

Concessions

Lei 11.079de 2004Lei de PPPs

18 monthsOf program

Qualified

145 projects

Investment of

BRL 142 billion (US$ 40 billion)Completed

70 projects

In progress

75 projects

Port

7 Terminal Operations

Concessions

Oil and Gas

4 Rounds of Auctions

Power

4 Power Transmission and

Generation Auctions

Source: Special Secretariat of the Investment Partnerships Program.

PPI Growth Project Progress


As for the auctions held and contracts signed in 2017, it is worth highlighting the investment forecast about BRL 142 billion (US$ 40 billion) over the next decades

Source: Special Secretariat of the Investment Partnerships Program.

PPI – Investments from auction of projects in 2017

142

100.8

21.5

8.2

6.6

3.4

1.5

Total Oil and Gas PowerTransmission

Powergeneration

Airport Powerdistribution

Port Terminals

Expected investments for auctions held in 2017

Presenter

Presentation Notes

http://www.cuitegiemfoco.com/2013/11/de-collor-dilma-veja-o-que-cada.html


PPI – Pipeline of projects for 2H2018

Airports Concessions – AL, CE, ES, MT, PB, PE, RJ, SE.13Port Terminal Concessions – Cabedelo, Santos andSuape.7

Power Transmission and Distribution Concessions24

Bidding rounds of oil and gas fields exploration 2

CPRM mining rights4

PPP Communications Network Management Aeronautics Command - COMAER

Highway Concessions – BR 153/282/, BR 364 RO/MT,BR 364/365 GO/MG, BR 101/ 290/386/ 448 RS 3Railway Concessions – EF 151 SP/MG/GO/TO (North-South), EF 170 MT/PA (Ferrogrão) and EF 334 BA (Fiol)3

Bid

Timeline

4th quarter of 2018

4th quarter of 2018

Auction

3rd quarter of 2018

4th quarter of 2018

4th quarter of 2018

2nd quarter of 2019

4th quarter of 2018

1st quarter of 2019

4th quarter of 2018

4th quarter of 2018

3rd quarter of 2018

4th quarter of 2018

3rd quarter of 2018

3rd quarter of 2019

3rd quarter of 2018

4th quarter of 2018

Source: Programa de Parcerias para Investimentos

1


The fiscal crisis in brazil brought back thesubject of privatization on the politic andeconomic agenda, and as a result states have104 projects under study and to be tenderedthroughout the next years.

The majority of these project will be eitherconcession or PPP, but couple statecompanies will be sold.

The 5 most common sector: Ports, Airports,Public Services, Tourism/Events, and Roads.

AL - 2

BA - 2

RS - 7SC - 2

MS - 3

MT - 6

SP - 4

RJ - 1

ES - 4

MG - 13

DF + GO - 18

PI - 22 CE - 14

RN - 6

State Projects (104)

• Jericoacoara Airport (CE); • Aracati Airport (CE);• Highways GO-010/020/060/070/080/139; E213 (GO); • Highways MT-100, MT-246 and MT-320 (MT);• Highway ERS-324, ERS287 e ERS020 (RS);• Industrial Complex and Port of Pecém (CE);• Port of Luis Correia (PI);• Sapucaia do Sul Zoologic (RS);• Ceará Convention Center (CE).

Opportunities

States – Pipeline of Projects


Municipalities, like the States, also have 59projects under study to be tenderedthroughout the following years.

The majority of these project will be PPP anda couple state companies may be Privatized.

The 2 most common sector: Public Servicesand Tourism/Events.

Salvador, BA - 5

Porto Alegre, RS - 12

Florianópolis, SC - 2

São Paulo, SP - 13

Rio de Janeiro, RJ - 6

Teresina, PI -12

Municipal Projects (59)Boa Vista, RR - 2

Porto Velho, RO - 7

• Teresina Airport (PI);• Salvador Convention Center (BA);• Porto Alegre Convention Center (RS);• Public illumination in Porto Alegre (RS);• Public Illumination in Teresina (PI);• Public Illumination in São Paulo (SP);• Pacaembu Stadium (SP);• Lindolfo Monteiro Stadium (PI);• Waste management in Teresina (PI).

Opportunities

Municipalities – Pipeline of Projects


Thank you

Mauricio EndoHead of Government & Infrastructure Latin AmericaKPMG in [email protected]+55-11-3940-8322

SESSION 4 – INFRASTRUCTURE · Law No. 8,666/93 (Bidding Law:) Regulates art. 37, item XXI, of the Brazilian Federal Constitution; establishes rules for bids and contracts of the

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