Slow train?

22 August 2012 By Raul Gallegos

President Rousseff hopes private investors will help provide $66 bln for rail and roads over the next 20 years, boosting growth – and that’s just a start. But past state-led efforts have fallen short of expectations. Now, red tape is still a problem and financing is a challenge.

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Brazil’s government on Aug. 15 unveiled a $66 billion, 20-year infrastructure investment plan, focused on road and railroad infrastructure. The announcement marks the latest move by President Dilma Rousseff to stimulate the Brazilian economy. The last weekly central bank survey of economists expects GDP to grow less than 1.81 percent in 2012.

The government plan includes offering concessions to the private sector in roads and railways that should lead to $39.3 billion in total investments over the next five years, according to Brazil’s infrastructure ministry. Of that total, $27.7 billion would be for the rail network and the rest for roads. The plan also contemplates an additional $26.3 billion in road and rail investments over the following 15 years.

Brazil’s central bank reduced its policy interest rate to 8 percent on July 11, the eighth cut in less than a year.

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