Concessions should generate BRL 357 billion in investments by 2025, says Economia

The concessions made by the Jair Bolsonaro government (PL) since 2019 should boost investments in infrastructure of around BRL 356.8 billion by 2025, calculates the SPE (Secretariat of Economic Policy), of the Ministry of Economy.

This year alone, the expectation is that the investments contracted from the PPI (Investment Partnership Program) will reach R$ 78 billion – an absolute increase of R$ 38 billion in relation to the amount invested in 2021 in the contracts linked to the program.

In the SPE’s accounts, this growth can generate a positive impact of approximately 0.40 percentage point on the 2022 GDP (Gross Domestic Product).

The Minister of Economy, Paulo Guedes, has cited on different occasions the investments already contracted through privatizations and concessions to ward off the pessimism of analysts and support the government’s argument that Brazil will grow this year.

The official projection of the ministry indicates an advance of 2.1% in GDP this year, but the number may be revised in March, when the SPE will disclose new parameters for updating the Budget.

Even if there is a review, the economic team maintains that growth will be greater than what is estimated by the market today – a rise of only 0.30%, according to the Focus Bulletin, collected by the Central Bank.

Analysts see the increase in the basic interest rate, the Selic, currently at 10.75% per year, one of the factors that can slow down economic activity throughout 2022. The government, in turn, remains more optimistic.

“We are looking at factors on the supply side, while the market has been looking at demand issues a lot. The fall in car production is not a drop in demand, it is a supply problem. Water crisis and pandemic are supply problems”, says the boss of the Special Advisory for Strategic Affairs, Adolfo Sachsida.

“As they [os problemas] normalize, I believe that we will have a better year than most expected, mainly due to private investment”, he adds.

The SPE’s estimate considers privatization and concession auctions held since 2019 and part of the portfolio scheduled for 2022. Last year, for example, the PPI held 22 airport auctions, the concession of Cedae (Companhia Estadual de Águas e Esgotos do Rio de Janeiro). Janeiro) and the 5G auction.

The amounts, however, do not include the privatization of Eletrobras, which had its first stage recently approved by the TCU (Union Court of Auditors).

Recently, private investors returned concessions to the government that had been auctioned during the Dilma Rousseff (PT) government. The list includes airports, such as Galeão (RJ) and Viracopos (SP), and five highways. In the case of highways, the government has found it difficult to rebid the returned sections.

Guedes has also publicly complained of difficulties in selling state-owned companies, a process that also goes through the PPI. The TCU postponed the analysis of the privatization of Eletrobras after disagreements between ministers about the amount to be received by the Union. The privatization of Correios was approved in the Chamber, but is stalled in a Senate committee.

The economic team, however, has recently made an attempt to show results. In the fiscal area, the ministry has already resorted to Michel Temer government projections to show that the picture of public accounts is better than estimated.

Now, the focus is on showing that the concessions are advancing – a central theme for the liberal agenda that Guedes wants to implement.

Sachsida says that the current model of concessions is more attractive to the private sector, as it benefits the proposal with greater planned investment rather than the greater grant amount to be paid to the federal government – ​​a format used in auctions carried out in PT administrations.

Considering the entire period of the contracts, whose duration may vary, the government expects investments to total R$ 1.3 trillion. The highest amounts involve concessions in the areas of transport and energy.

According to Sachsida, the value of investments linked to PPI concessions in 2022 is equivalent to 1% of GDP. It does not mean that it will drive growth of this magnitude, but, according to him, it gives a dimension of how robust this participation is.

For the minister’s advisor, the recent rise in the country’s investment rate – which reached 19% of GDP in the 12 months to September 2021, after falling to levels close to 15% in 2017 – is already a symptom of the new cycle of concessions. and has positive effects. The government calculates that each additional percentage point in the investment rate means 770 thousand new jobs and R$ 305 more in the average GDP per capita of the population.

In the evaluation of the Economy, the forecast of private investments should be sustained even in a more turbulent environment such as the current one, due to the fear of a conflict between Russia and Ukraine.

“The faster we move towards an agenda of fiscal consolidation, the more prepared we will be for international turmoil. And I believe that we are prepared to advance in this agenda of concessions and attraction of the private environment”, he says.