North Rodoanel Auction is suspended due to ‘adverse economic scenario’

The concession auction for the northern section of the Rodoanel, scheduled for this Wednesday (27), was “temporarily suspended”, said the government of the State of São Paulo, which claimed the impact of macroeconomic uncertainties in attracting investors.

“The scenario of rising inflation, high interest rates and scarcity of inputs imposes the temporary postponement of the North Rodoanel auction so that the concession model can be adapted to the current national situation”, the São Paulo government said in a statement on the state agency’s website. of transport, Artesp.

The government specifically mentioned high inflation in the construction sector and the rise in the Selic, the basic interest rate, as some of “the obstacles to long-term credit for investors — which has become more expensive and unattractive.”

Auction of state highways attract few investors

Soaring inflation, which makes construction inputs more expensive, and a distant prospect of profits threaten the holding of auctions for the state highways of Minas Gerais, São Paulo and Paraná scheduled for this year and which are trying to attract around R$ 55 billion in investments. over 30 years.

Faced with the uncertainties, Minas Gerais decided to postpone the competition for a new ring road to remove cargo traffic from the urban region. The auction was scheduled to take place in two weeks.

The construction inflation already exceeds 30% against the 11.30% of the IPCA accumulated until April. The trend is upward in view of the increase in the price of asphalt (oil-derived) and steel.

According to consultants who advise groups of investors interested in the projects, there is a lot of uncertainty. The construction inflation already exceeds 30% against the 11.30% of the IPCA accumulated until April. The trend is upward in view of the increase in the price of asphalt (oil-derived) and steel.

In addition, high interest rates close the door to long-term credit for financing these investments.

Many of these groups prefer to concentrate investments in federal projects, which already have tolls built. The demand (traffic) studies carried out have already taken the billing plazas into account.

On state highways, these squares will have to be built. Also according to the consultants, interested parties will have to invest first to earn later, while on federal roads these groups are already starting to generate toll revenues.

Another downside is the auction model. Most projects provide discounts on tolls. The group that offers the biggest discount wins, which further reduces its future revenue margin.

Therefore, the federal government assesses that the state concessions program should not harm the auctions scheduled until the end of Jair Bolsonaro’s (PL) term.