The Law Reviews

The Public-Private Partnership Law Review

Edition 3

Published: May 2017Contents


Editors' Q&A

i) What are the hot topics?

The hot topic in Brazil is the discussion of measures that could help the country to mitigate the adverse impact caused by the economic crisis the country has experienced in recent years. One of the main topics is the creation of the Investment Partnerships Program (PPI), as established in Federal Law No. 13,334/2016.

Historically, Brazil has lacked well-organised growth plans to boost its economy and increase infrastructure projects, and has not rendered public services that the population is highly in need of. Such a scenario, undoubtedly, affects private investors’ appetite for executing new projects in the country, and the implementation of new and important tasks (for instance, the most important grants of railways concessions date back to the 1990s and grants of federal airports only began at the beginning of this decade)

Aiming to change this outlook, the federal government organised the PPI as a legal tool with regard to the infrastructure development in the country. Actions like the organisation of the PPI may provide conditions that will attract investment in infrastructure projects and may create a new environment of legal certainty that will encourage private investments in Brazil. This may help Brazil’s economy – which is struggling – to recover at a fast pace.

ii) Tell us about any key legal developments – recent or pending – and their international impact.

Currently, there are several discussions related to the enactment of new acts for governing bidding proceedings and contracts with the government in general and public-private partnerships specifically. Such debates may lead to the reconfiguration of part of the Administrative Law in Brazil and may help to encourage private investments in the country.

In addition to the PPI, which intends to mobilise the government’s institutional apparatus to ensure the implementation of large projects, the promulgation of the Government Corporations Law (Federal Law No. 13,303/2016) also stipulates rules on corporate governance of corporations controlled by the government, their bidding proceedings and contracts.

More recently, the federal government also published Provisional Measure No. 752/2016 to establish guidelines for the extension of term and new bidding of concession agreements in the highway, railway and airport sectors comprised by the PPI.

Finally, there are other ongoing discussions, including the reform of the Federal Procurement Law (Federal Law No. 8,666/1993).

iii) What are the biggest opportunities and challenges for practitioners and clients?

At the federal level, the opportunities relate to the projects embraced by the PPI, including:

a) airport infrastructure: airports of Porto Alegre, Salvador, Florianópolis and Fortaleza;

b) port terminals: lease of port terminals in Santarém, Rio de Janeiro, Salvador and Paranaguá;

c) roads systems: federal roads Nos. BR/365/GO/MG and BR 101/116/290/386/RS32;

d) railroads: concessions of EF-151 SP/MG/GO/TO Norte-Sul, EF-170 MT/PA – FERROGRÃO and EF-334/BA – FIOL;

e) water and sanitation utilities: privatisation of mixed ownership government corporations, including Companhia de Águas e Esgoto do Estado do Rio de Janeiro, Companhia de Saneamento do Pará and Companhia de Águas e Esgoto de Rondônia;

f) power utilities: privatisation of mixed ownership government corporations including Amazonas Distribuidora SA, Boa Vista Energia SA, Companhia de Eletricidade do Acre, Companhia Energética de Alagoas, Companhia Energética do Piauí and Centrais Elétricas de Rondônia;

g) lottery privatisation of Loteria Instantânea Exclusiva – LOTEX.               

The recent municipal elections in Brazil (which took place in October 2016) may also lead to an increase of opportunities at this level, especially for the grant of public lighting services and social impact projects. In this sense, investors should pay attention to platforms for the implementation of smart cities, and projects related to health and education.