Brazil's government unveiled measures on Wednesday to lure up to 133 billion reais ($66 billion) in private investment for new roads and railways needed to unclog the country's transportation bottlenecks. The measures include a plan to double capacity of the country's main highways, with concessions for roads and railways, Transport Minister Paulo Passos said at an event in the capital Brasilia.
The government, through Brazil's massive state development bank BNDES, will also offer subsidised loans for investors looking to get in on the projects. The steps are an effort by President Dilma Rousseff to modernise Brazil's economy, which has stalled over the past year, following average growth of more than 4 percent over much of the past decade. By making improvements to infrastructure, including clogged roads and railways, the government argues, it can lower costs for business and make the economy more efficient in the years ahead.
Rousseff, during comments at the ceremony, said the measures would help Brazil, Latin America's biggest country, become "richer, stronger, more modern and more competitive." Such investments, she added, can make "Brazil finally have infrastructure compatible with its size." The government also hopes the investment will jump start the economy in the short term. The investments, the minister noted, are expected to take place over the next five years. "This isn't a program for investments to be diluted over the next 15 or 20 years," Passos said.
The program foresees concessions to expand the country's old and overloaded road and rail systems. In addition to plans for major highways, the government hopes to lure investments for up to 10,000 kilometers (6,200 miles) of Brazil's rail network. The government in coming weeks is also expected to announce similar projects for the country's ports and airports.
Economists welcomed the measures, having long argued that Brazil must clear its sclerotic roads, ports, railways and airport terminals if it ever hopes to loosen the economy from shackles that have long held it back. Compared with recent efforts to spur consumer spending as a remedy for stalling growth, they say, the infrastructure projects can do far more long-term good. "This set of measures, if they materialise, would be a very positive effort to address constraints on Brazil's long-term growth potential," wrote Nick Chamie, an analyst at RBC Dominion Securities, in Toronto, in a Wednesday report.