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Brazilian Government Announces Infrastructure Privatization

Rousseff announced a plan to privatize 7,000 miles of railways and roadways. (Photo: Blog do Planalto)

Wednesday, August 15, 2012

On August 15, President Dilma Rousseff announced a new set of concessions to improve the country's infrastructure. The government will sell billions of dollars of state-run roads, railways, ports, and airports. Rousseff unveiled the first part of the plan to privatize around 10,800 miles of road and railways at a conference with 50 top businessmen in Brasilia, reports the BBC. The government hopes to attract $65.6 billion over 25 years, and $39.2 billion over the first 5 years.

The privatization initiative—carefully crafted by Rousseff—aims to stimulate sluggish growth. In addition, concessions could reduce energy and food costs. Privatization can also lead to greater transparency and lower levels of corruption in infrastructure. Finally, the concessions seek to improve the country's competitiveness and target the infamous "Brazil cost," a combination of insufficient infrastructure, bureaucracy, and taxes that create challenges to doing business.

During the announcement, Rousseff underscored the plan intends to create jobs and lower costs for consumers and consequently, to contribute to the government's social inclusion goals. "Brazil will be wealthier, stronger, more modern, and more competitive," Rousseff said. "Brazil will finally have infrastructure that's compatible with its size."

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