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Brazil Heading to Infrastructure Blackout

A consultant at both the Fundação Getúlio Vargas (FGV) and the Civil Construction Trade Association of São Paulo (Sinduscon), Ana Castelo, reports that the results of the Annual Survey of the Construction Industry (PAIC) 2002, just released by the government statistical bureau (IBGE), has confirmed what everybody already knew: 2002 was not a good year.

Castelo says the heavy construction sector shrank in 2002, mainly due to smaller investments by the government. The survey presents a detailed portrait that shows the drop in government spending, including spending on infrastructure.

Castelo warns that the country is headed for an “infrastructure blackout.” “The numbers clearly show this. Infrastructure investments are urgent if the country is to achieve sustainable growth,” she says.

The crisis in Argentina and presidential elections in Brazil were cited in a survey by the IBGE as reasons for reduced investments by Brasí­lia in public works in 2002.

The results of the Annual Survey of the Construction Industry 2002 was released on Friday and shows that between 1996 and 2002 spending in heavy construction dropped almost 10 percent, with the biggest cuts in highway maintenance.

According to Alexandre Brandão, of the IBGE, electricity rationing in 2001 affected heavy construction of power plants, highways and other infrastructure projects.

“Add the crisis in Argentina and domestic elections to the mix and you got a recipe for a downturn in government expenditures,” said Brandão, adding that although there was no recovery in 2003, the outlook for 2004 is for renewed investments by both the government and the private sector. 

Agência Brasil

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