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Celso Keppe
Road and Aviation Deputy Director of Egis in Latin America
Published on August 10, 2021

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Perspectives of investing in Infrastructure in Brazil and experience with Public Stewardship

After five years of economic crisis, culminating in the COVID-19 pandemic, the Brazilian economic prospects are quite positive for next year, with the re-launch of an ambitious infrastructure plan at the federal and state levels. Brazil plans to double its investments in infrastructure by 2021 through a broad program involving privatizations and concessions. The liberal reforms underway should make market access easier for foreign investors and limit the role of the National Bank for Economic and Social Development (BNDES) to that of a traditional development bank.

Brasilia

Brasilia - Crédits : © jcamilobernal - Thinkstock

Concessions and public-private partnerships will be favored in order to fund the modernization of over 25 thousand kilometers of roadways and the privatization of 44 airports and urban projects (smart cities) at the municipal level. These initiatives have attracted the interest of multilateral and bilateral financial institutions, such as the French Development Agency (AFD), which chose Egis to support the Brazilian cities of São Paulo, Curitiba, Recife and Belo Horizonte in their transition.

Experience with public stewardship

Enjoying its good image with Brazilian municipalities and boasting a network of reliable local partners, Egis has identified a large number of opportunities in Brazil in the urban service and Smart City segments, not just as a consultant, but also as an operator. In this scenario, Egis and its partners developed studies for the municipality of Alfenas, with 74,000 inhabitants and located in the south of the state of Minas Gerais, for the concession of Public Stewardship services, which can be divided into two large groups: Urban Stewardship, including services for the recovery and maintenance of the municipal transportation system, vegetation maintenance, public cleaning, road signal maintenance, public building and urban furniture maintenance, among others, and Virtual Stewardship, comprising the provision of software and computer systems that are essential for the municipality, such as the health system, tax aggregate amount calculation software, citizen communication software and, especially, an integrating platform that will establish connections between these systems and the respective information storage in a common database, all in the path towards smart and connected cities.

After the presentation of this study and its approval by the Alfenas City Hall with a score of 93 points out of 100, Egis invited its partners to take part in the public tender in an association. We are currently developing the technical and economic-financial studies to present the commercial proposal. This is the first time that a municipality in Brazil will use a PPP to operate services that do not involve tariff revenue charged from public service users, since all compensation for the service providers will be paid for by government under the concept of generating relevant “Value for Money” for the municipality and a significant improvement in the quality of urban services provided to its citizens.

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