Negotiations in Brazil over the bill instituting Public-Private Partnerships (PPPs) will be reopened during the next week of concentrated efforts in the National Congress. This period should include floor votes on matters assigned priority by the government.
The project establishing the PPPs was sent to the Senate in March; it creates a type of contract enabling private companies to execute public works and services and share in the risks. At the end of the contract, the concession reverts to the public domain.
The proposal is being analyzed by two Senate Commissions: Economic Affairs (CAE) and Constitution, Justice, and Citizenship (CCJ). The two commissions should begin to meet again on September 14 and 15, respectively, but the project should only be placed on the agenda when a voting consensus is reached.
The first round of negotiations during September’s concentrated effort will involve the new President of the Federation of Industries of the State of São Paulo (Fiesp), Paulo Skaf. A meeting was scheduled for next week between Skaf and the President of the CCJ, Edson Lobão, to discuss the matter.
Skaf visited the Congress last week to ask the presidents of the Senate, José Sarney and the Chamber of Deputies, João Paulo Cunha to expedite voting on the PPPs.
The President of the Fiesp reminded them that approval of the PPPs, with “clear and reliable rules,” is essential to ensure domestic and foreign private investments in infrastructure projects.
According to the leader of the government in the National Congress, Fernando Bezerra, the Minister of Planning, Guido Mantega, declared that he is available to take part in negotiations to speed up passage of the PPPs bill.
Next week’s concentrated effort will be the last one prior to the October 3 elections. Due to the heavy schedule, analysis of the project may be postponed until after the elections. The proposal has been under discussion in the CAE since May.
In New York, in June, at the Brazil & Partners: Investment Opportunities conference organized by the Brazilian government, the Minister of Planning, Guido Mantega, underscored the need for foreign businessmen to invest in Brazil to give greater sustainability to the Brazilian economy.
“Due to budgetary restrictions, Brazil does not have funds to make all the necessary investments. Therefore, the private sector must become the chief collaborator of the Brazilian government,” Mantega observed.
The Minister pointed out that the Brazilian economy offers many possibilities and, if more and more investors are attracted, it will be capable of impressive results, similar to those achieved by Asian economies in recent years.
In the Minister’s view, the Public-Private Partnership (PPP) is the keystone to reducing the vulnerability of the Brazilian economy. This type of partnership will be applicable in various areas, from basic sanitation and construction to electric power.
The Minister of Finance, Antônio Palocci, said, in turn, that Brazil is experiencing a new stage of sustainable growth. He presented a positive picture of Brazil to the 676 American, Canadian, and Mexican businessmen attending the meeting in New York.
During his speech to the investors, Minister Palocci provided figures on the Brazilian economy showing that exports continue to grow, which is a source of tranquillity for the country’s economic policy. “Brazil is much less vulnerable to outside shocks,” he emphasized.
Palocci stated that many investors want to know whether the Brazilian government will continue in its reform efforts. The Minister explained that President Lula’s leadership represents the greatest assurance that the path of fair and consistent policies is a solid and permanent one.
The Minister of Development, Industry, and Foreign Trade, Luiz Fernando Furlan, said, for his part, that it is worthwhile for foreign entrepreneurs to invest in the industrial sector in Brazil.
“Brazil is playing a big role in the production of the most recent generation of buses and trucks. Annual growth in this area exceeds 50%,” Furlan announced.
According to the Minister, cell phones are another area in Brazil that can generate profits for investors. Investments in this sector will triple in the coming years, Furlan said. Brazil is currently considered the world’s largest producer of electronic games for cell phones.
The footware sector is also quite promising, Furlan pointed out. This year the sector will grow 15%. The Minister affirmed that Brazilian exports are growing over 25% annually, and imports, around 20%.
“Many investment opportunities exist in Brazil, as well as a reliable government and competent teams. Our goal is to strive for economic growth that is competitive, sustainable, and efficient,” the Minister underscored.