Federal budget cut leaves roads without maintenance

Federal roads are among the infrastructure assets that have suffered the most from cuts in federal investment in recent years.

An annual survey on the condition of roads in the country carried out by the CNT (National Confederation of Transport) showed that the amount applied in 2021 was the lowest in the last two decades.

In December last year, the federal government launched the Integrated Long-Term Infrastructure Plan 2021-2050, in which it outlines ways to increase the investment rate.

The expectation is that the private sector, through concession contracts, will be responsible for expanding the country’s infrastructure over these three decades, with the exception of highways, in which a considerable portion of investments will come from federal and state budgets.

According to the CNT, of the nearly 110,000 kilometers of paved federal and state roads across the country, 62% are considered fair, bad or terrible in matters such as paving and signage. Of these, 91% are under public administration.

On federal roads under public administration, the quality of signaling has regressed to the levels of 2014, when an improvement began, driven by the BR-Legal program.

The ten best sections analyzed by the CNT are in São Paulo. The ten worst are in Pernambuco, Maranhão, Bahia, Amazonas, Acre, Rio Grande do Sul and Santa Catarina.

The average annual federal spending on works fell from R$204,000 per kilometer in 2016 to R$109,000 last year. In the granted roads, it was R$ 381 thousand in the average of the 2016-2020 period

The federal government’s integrated plan for 2021-2050 foresees a growth in total road investment from R$14.4 billion last year to an average of R$27 billion in the period 2022-2030, with a considerable portion coming from the public sector.

Among the main concessions highlighted in the plan is the joint management of Dutra and Rio-Santos (BR-101/116/RJ/SP) for 30 years by the CCR group, which won an auction held in October last year and recently took over the concession. .

A section of Rio-Santos, between Itaguaí (RJ) and Angra dos Reis (RJ), was classified by the CNT as bad, mainly because of the paving and geometry of the road.

The concessionaire must invest BRL 14.8 billion throughout the concession in the modernization of the two roads and apply another BRL 10.8 billion in operational services, according to the Ministry of Infrastructure.

Government plan sees infrastructure recovery by 2050 in ‘transformative’ scenario

In the Integrated Long-Term Infrastructure Plan 2021-2050, the government states that the stock of infrastructure capital in Brazil is much lower, in proportion to the size of the economy, than that of OECD (Organization for Economic Development Cooperation) member countries. in addition to reducing the competitiveness and productivity of the economy.

Two main scenarios are outlined. If reforms for fiscal balance are approved, but with the absence of other changes that would attract more capital to the country, the average investment rate would be 18% of GDP in the period, and productivity growth would be nil.

If, in addition to the fiscal issue, a broad and profound set of measures aimed at increasing investment and productivity in the economy were implemented, the average investment rate would reach 19.5% of GDP. The proportion of investment in infrastructure would correspond to 18.5% of the total.

In reais, the stock could almost triple in this scenario classified as “challenging”, in the event of maintaining an investment rate in infrastructure of 3% of GDP in the period. It would go from the current BRL 3 trillion to more than BRL 8 trillion in 2050.

As a result, an infrastructure stock, estimated at 36% of GDP in 2018, could exceed 50%, a level very close to that observed in developed countries, according to the document.