Brazil's risky road business?

Questions are being asked in Brazil over the terms and conditions set on the tender for Rodoanel, a ring-road around Sao Paulo.
March 1, 2012 Read time: 1 min
Questions are being asked in Brazil over the terms and conditions set on the tender for Rodoanel, a ring-road around Sao Paulo. The Brazilian Government plans to allot the deal for the Southern section to a private bidder, providing that the firm builds and operates the Eastern section as well as taking onboard responsibility for the environmental risks associated with the project and the cost of expropriating properties and land for it.
However, contractors, banks and investors have raised objections as this is a move that has not previously been seen in Brazil's highway concession sector.

The winner of the tender process will pay a small amount, US$215 million, which is somewhat less than has been expected for projects of this scale in the past. The banking sector in Brazil has said that it would like to see a higher return over investment ratio so as to match the higher level of risk.

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