For scale of ambition, Brazil scores full marks. In late 2012, the Roussef administration launched a $121 billion logistics programme, leaving no stone unturned in its efforts to modernise the country’s ailing road, rail, port and airport networks.
While the “Programme for Investment in Logistics” had a 30-year timeframe, a significant chunk of capital expenditure was scheduled for the first five years, including $28 billion of the $46 billion railways programme and more than half of the $21 billion roads programme.
Since then, private investors have not been shy in lining up for a slice of the cake. For example, towards the end of last year, $9.1 billion was raised from the auctions of majority stakes in Galeao and Confins airports on the Sao Paolo Stock Exchange. And, if you’re looking for a measure of heat in the market, the bids received for Galeao and Confins were respectively 294 percent and 66 percent higher than the ceiling price originally stipulated.
Small wonder then that Moreira Franco, head of the Civil Aviation Authority, was moved to proclaim: “We have seen a great demonstration of confidence in Brazil’s future.” And it’s not just airports: road auctions have also had bidders flocking.
Not everything has gone entirely to plan. In August last year, a $16.7 billion high-speed rail project between Sao Paolo and Rio de Janeiro was delayed by a further year – having already suffered two previous hold-ups – when only one bid was received by the deadline. Having been slated for completion by the 2016 Olympics, it now has a target date of 2020. And then of course, there has been the negative publicity around the struggle to meet deadlines for soccer World Cup-related infrastructure.
Nonetheless, Brazil is fast becoming a major global economic power – and that’s helping to make its infrastructure market hotter than Copacabana beach at the height of summer.