Delays for key Brazilian road projects

A series of major road projects in Brazil now look set to be delayed. Key road widening projects works awarded between 2012 and 2013 may now take longer than the original five year deadline to complete. Six road concession projects were awarded in the period, totalling over 3,000km of roads to be extended or upgraded. The contracts require that at least 10% of the planned work must be complete before any tolls can be charged. This initial phase has been carried out, but later stages to expand the roads have
March 3, 2016 Read time: 2 mins
A series of major road projects in Brazil now look set to be delayed. Key road widening projects works awarded between 2012 and 2013 may now take longer than the original five year deadline to complete. Six road concession projects were awarded in the period, totalling over 3,000km of roads to be extended or upgraded. The contracts require that at least 10% of the planned work must be complete before any tolls can be charged. This initial phase has been carried out, but later stages to expand the roads have been delayed due to financial and regulatory issues, such as delays in obtaining environmental licenses. These licences were not required for the initial 10% of works, due to provisional licenses being issued for 25km stretches. Only three of the six road project received long term financing, though this funding failed to reach the 70% of total investment that the Brazilian Government had detailed during the tenders for the projects. This led to firms having to seek further financing at higher interest rates from other banks. The other three projects failed to secure any financing and as such face continued delays. 1305 Odebrecht Transport has confirmed that it is still awaiting financing from national development bank BNDES, though it is still on target to meet the time frame for works. Via 040 says that works are being carried out to the schedule
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