News & Analysis

Brazil’s transport minister predicts infra boom

Mauricio Quintella ties trade growth to opportunities in the sector as the country moves to attract private investments to smooth the transition of goods to and from its ports.

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Brazil’s transportation minister made the case on Thursday that the South American country’s projected growth will make roads, railroads and airports attractive opportunities for foreign investors.

At the Invest in Brasil conference in New York, an event organised by the Brazilian-American Chamber of Commerce, Mauricio Quintella, Brazil’s minister of transportation, ports and civil aviation cited an optimistic economic outlook and a new federal programme that encourages public-private partnerships as reasons the country’s infrastructure market is set for a boom.

He highlighted the Investment Partnerships Programme (PPI), which was launched in 2016, in the wake of the Electrobras scandal, to increase private investments in Brazil’s infrastructure and improve transparency around how project contracts are awarded. The programme identified 145 priority projects, 56 of which had been auctioned or renewed as of last November.

Quintella acknowledged Brazil “has historically invested very little in infrastructure” which has created “bottlenecks in the outflow of exports and the movement of people”. He said Brazil has invested only two percent of the country’s GDP over the past two decades, compared with five percent for neighbouring Latin American countries and seven percent for fellow partners in the BRICS trading bloc.

But the country is seeking to turn that around with the PPI initiative. Brazil’s infrastructure opportunity is linked to trade, Quintella said, adding that investing in the railroad sector is the “greatest priority for Brazil today”. Increasing the efficiency of moving goods to and from ports is key to supporting growth in other industries such as agriculture, he commented.

Airports are another sector poised to take advantage of Brazil’s economic growth, Quintella said. Six airports in the country’s northeast will be up for concession auctions by the end of this year, and Brazil recently approved an Open Skies agreement with the US that will allow more flights and airline competition.