Odebrecht wins bid for 850km Brazil road

BR-163/MT is the second concession to be auctioned off by the Brazilian government under its $121bn Logistics Investment Program.

The Brazilian National Land Transportation Agency (ANTT) has picked a winner in the auction for the BR-163/MT highway it held yesterday on the São Paulo Stock Exchange.

Brazilian construction conglomerate Odebrecht beat out six rivals in the competition for the 850.9 kilometre-long stretch, which acts as a major route for the transportation of grains harvested in the Midwest and Northern regions.

Odebrecht was the bidder that offered the lowest toll fees to be charged to end users, at around a 52 percent discount to the ceiling specified in the auction’s announcement.

The Brazilian Minister of Transport, César Borges, described the decision as “another stage cleared, achieving something considered crucial by the government: reasonable fees.” He said the concession would bring great benefits to Brazil’s agribusiness, as part of the ministry’s broader ambition to initiate a fresh wave of investment in the country’s infrastructure.

This auction is the second one to happen under the federal government’s Logistics Investment Program, which aims to address the country’s logistics deficit by spending $121 billion on roads, ports, airports and railways over the next 30 years. The concession is meant to generate investments worth R$4.6 billion (€1.5 billion; $2 billion) over its 30-year duration, which will be used in the recovery, maintenance, and construction of additional lanes and stretches.

The sections under concession range from the border states of Mato Grosso and Mato Grosso do Sul to the city of Sinop. Odebrecht will now have to build 453.6 km in additional lanes in the stretch that connects the highway to the border of Rondonópolis and to the Rodovia dos Imigrantes.

The investment needed by the private sector to duplicate these stretches – which must be completed within the first five years of the concession – is estimated at around R$ 1.263 billion.

The Brazilian government intends to procure a total of nine lots of toll road concessions, spanning 7,500 kilometres and requiring $21 billion of investment, over the next 30 years. The winners will be the bidders who can submit the lowest toll rates.

Headquartered in Salvador, Bahia, Odebrecht has already been a beneficiary of the government’s logistics push. Earlier this week, a consortium it led alongside Singapore’s Changi Airports International paid R$19.02 billion for a 25-year concession to expand, maintain and operate Galeão, Rio de Janeiro’s main airport.