Opportunities In Brazil's New Infrastructure Program

In the last two decades Brazil made some progress in its infrastructure. New roads were built and existing ones repaired, new ports were created, the power grid was expanded and major airports were modernized, among other advancements. But it is still far from ideal. As a developing country with a population of more than 200 million and the 5th largest territory in the planet, the nation's infrastructure continues to be in dire need of improvement. The economic and political crisis in Brazil unfortunately put a halt to many infrastructure projects. In an attempt to address this need and also try to revive the country's economy, Brazil's new government has launched the Programa de Parceria de Investimentos (PPI), a new infrastructure program.

Structured under Federal Law 13,334/2016, the new program endeavors to promote a more attractive environment for investments in the infrastructure sector. While trying to strengthen the bonds between public entities and private enterprise, the PPI encourages private investments in infrastructure and the privatization of state-owned assets.

The new law touches on important issues that have been a point of concern of many companies in their dealings with the Brazilian government. First of all, the PPI recognizes the need for secure and stable policies and establishes that the federal government must set long-term policies and strategic guidelines for investment, privatization and public bids. It also determines that infrastructure projects be considered of national priority by all public authorities (from the federal, state and local levels), requiring an efficient, consistent and timely performance by all public entities involved in the development and approval of PPI projects.

Additionally, all public entities involved in PPI projects must propose regulations to reduce bureaucracy and ensure a higher transparency level in their actions. Such measures will be supervised by the program's Council formed by members of the federal cabinet, the CEO of Brazil's development bank (BNDES) and the CEO of the Federal Savings Bank (Caixa Econômica Federal).

Infrastructure projects can be part of the program if they are executed through partnership agreements or are included in the Brazilian National Privatization Program (Federal Law No. 9,491/97).

The public authorities in charge of creating a project may grant interested third parties the opportunity to present suggestions and proposals. The actual structuring of...