Download deficit in infrastructure

INFRASTRUCTURE IN BRAZIL
Scenarios and Opportunities
NY, 4th October 2012
INTRODUCTION

One of the key factors for a sustainable socioeconomic growth is infrastructure:
ENERGY GENERATION
TELECOMMUNICATIONS
TRANSPORTATION SYSTEM
SANITATION
HOUSING
(ROADS, RAILROADS, AIRPORTS…..)
2
INTRODUCTION
The correct dimensions of a country’s infrastructure represents the welfare of its
population, because it brings:

Business costs reduction;

Improvement of country’s productivity;

Enhancement of the quality of goods and services produced; and,

Regional integration
After some years of growth, one of the core issues of Brazilian’s agenda is
infrastructure development.
3
BRAZIL’S ECONOMIC OVERVIEW
4
BRAZIL OVERVIEW
SOCIAL INDICATORS

Brazil has been experiencing a major social and economic transformation:

An increase of 27.7% in GDP per capita  US$ 12.7 thousand (2003 to 2011 – Ipea data)

A reduction in income inequality: wealthiest increased by 16.6%  the poorest rose by 91.2%
(Ipeadata 2003 to 2011)

More than 30 million people have risen from the poverty level to the middle class bracket
(“New Middle Class”)

An increase of 30% in the number of new homes over the past ten years (IBGE)

A reduction in illiteracy: from 11.4% in 2004 to 8.6% in 2011 (IBGE)
HIGHER DEMAND FOR BASIC SERVICES
PRESSURE FOR EXPANSION OF INFRASTRUCTURE
5
BRAZIL OVERVIEW
ECONOMIC INDICATORS

Brazilian’s GDP: US$ 2.4 trillion (the world's sixth largest economy)

GDP’s Growth: 2.7% (in 2011); 1.6% (in 2012) and 4.5% (in 2013 - Bacen)

Inflation Target: 4.5% per year (2012, 2013 and 2014) – with a 2% “margin”

Inflation Forecast for 2012: 5.2% (Bacen – 06/09)

Average Unemployment rate: 5.3 % (August/2012) (IBGE)

Foreign Reserves: US$ 377 billion (August/2012) (Bacen)

(FDI) Direct Foreign Investments in 2012: US$ 60 billion (Bacen)

Exports: US$ 264 billion/year (Forecast for 2012 of the MDIC)
SUSTAINABLE GROWTH IS ONLY POSSIBLE WITH THE
EXPANSION OF INFRASTRUCTURE
6
DEFICIT IN INFRASTRUCTURE
7
DEFICIT IN INFRASTRUCTURE
PORTS
BRAZILIAN PORTS:
MAIN BOTTLENECKS AND DEMANDS
US$
billion
US$ 21,4 BILLION TO MITIGATE PORT INFRASTRUCTURE PROBLEMS
8
DEFICIT IN INFRASTRUCTURE
HIGHWAYS
RAILROADS
A HUGE GAP IN TRANSPORTANTION INFRASTRUCTURE
9
DEFICIT IN INFRASTRUCTURE
HOUSING
EVOLUTION OF THE HOUSING DEFICIT – MILLIONS OF HOMES
HOUSING DEFICIT ESTIMATED AT 5.6 MILLION HOMES
10
GOVERNMENT PROGRAMS
11
GOVERNMENT PROGRAMS
GROWTH ACCELERATION PROGRAM (PAC)
The investment forecast: US$ 575 billion (2012 – 2014)
THE MAIN SECTORS (IN BILLIONS)
POTENCIAL FOR CONCESSIONS AND PUBLIC-PRIVATE PARTNERSHIPS
12
OTHER GOVERNMENT
PROGRAMS
13
OTHER GOVERNMENT PROGRAMS
INVESTMENT PROGRAM IN LOGISTICS – HIGHWAYS & RAILROADS (AUG 15, 2012)

Concession of 7.5 thousand kilometers of Highways

Concession of 10 thousand km of federal railroads

Investments of over US$ 66 billion in 25 years:

US$ 21 billion in highways

US$ 45 billion in railroads
AIRPORT CONCESSIONS (2012)

Guarulhos, Brasília and Campinas Airports were conceded by the Federal
Government in February 2012: US$ 14 billion
PETROBRAS INVESTMENT PLAN – 2012 TO 2016

Oil: US$ 236.5 billion (2012 – 2016) relating to 980 projects

Gas: US$ 13.5 billion (2012 – 2016) relating to 105 projects
14
FORECAST OF NEW INITIATIVES
AIRPORTS
PORTS
•
Bids on concessions for
scheduled for October 2012
•
Investments: US$ 15 to 20 billion through
to 2030
•
ports
are
•
Bids on new concessions for two
internationals airports are scheduled for
October 2012 – Rio de Janeiro e Belo
Horizonte
•
Investments: US$ 1 to 2 billion
Adaptation of existing ports and the
creation of new ports
15
2014 WORLD CUP
16
2014 WORLD CUP
INVESTMENT OF R$ 27 BILLIONS
17
RIO OLYMPIC GAMES 2016
TOTAL INVESTMENT OF US$ 29 BILLIONS
18
WHAT IS NECESSARY TO LEVERAGE
INVESTMENTS?
Favorable political
and institutional
framework
Favorable economic
development
Political will
(government
programs)
Investment
“Planning Cycle”
Major
events
19
PROJECT PLANNING AND
DEVELOPMENT
20
HOW TO RECONCILE AGILITY, QUALITY,
LEGALITY AND CONTROL?
PLANNING CYCLE (Law 8666/93)
Preliminary
technical studies
• Development of preliminary technical studies such as the study of
technical feasibility, economic viability, environmental feasibility and
legal and juridical studies.
• Set of necessary and requisite elements, with an appropriate level of
Basic Project
accuracy to characterize the works or services, prepared on the
basis of indications of the preliminary technical studies.
• Set of necessary and requisite elements for the full implementation of
Executive Project
the works  drawings and specifications of materials and services
that enable the realization of the physical works.
21
PROJECT PLANNING AND
DEVELOPMENT
Each step of the planning cycle requires specialized services:
 Engineering Project Services (construction engineering and assembly; environmental
engineering, etc.)
 Economic and financial analysis of projects (feasibility)
 Project management
 Technical support services
 Technical and financial management and monitoring of works
 Analysis of compliance between project design and execution
22
GROWING DEMAND FOR
CONSULTANCY SERVICES

To solve bottlenecks in infrastructure we need a robust specialized consultancy
with efficient techniques and experienced professionals

Brazil is currently training a large contingent of qualified professionals

The Brazilian market for specialized services in infrastructure sectors is
expanding and becoming attractive in global terms
The consultancy sector will receive 5 to 10% of the total to be invested in
infrastructure in Brazil in the coming years
23
CHALLENGES
24
Challenges

RECUPERATION OF THE BRAZILIAN TECHNICAL CAPACITY

ATTRACTING FOREIGN CONSULTANCY COMPANIES

GOVERNMENT AND PUBLIC INCENTIVES FOR SERVICE SECTORS
25
THANK YOU!
CESAR CUNHA CAMPOS
Director
www.fgv.br/fgvprojetos
26