Justice will decide whether BR-040 remains with concessionaire – 08/16/2023 – Market

Two days before the end of the concession contract, the future of BR-040 on the stretch between Juiz de Fora (MG) and Brasília remains undefined. Administered by Invepar, the highway named Via 040 is in the process of being re-bid and the return of the asset to the Union is scheduled for this Friday (18).

In the midst of an impasse between the company and ANTT (National Land Transport Agency), the decision on a further postponement of this deadline ended up in court, which will decide on Friday —the last day of the contract— whether or not the concessionaire should continue providing services for a few more months.

If Invepar returns Via 040, the 11 toll plazas will be deactivated, and mechanical, conservation, monitoring and emergency services will no longer be provided. The stretch, then, would be administered by Dnit (National Department of Transport Infrastructure).

With 936 kilometers in length, the highway was granted in 2014 for a period of three decades. However, just over three years later, in 2017, Invepar announced that it would file a re-bidding request, which is the friendly return of the asset so that a new auction can be held by the government. The application was approved in 2019.

On its website, Via 040 states that, since the beginning of the operation, it has been facing a challenging scenario and different from the period that preceded the auction, held in 2013.

“The conditions of bank financing for investments were modified, there were delays and fragmentation in the issuance of environmental licenses for the execution of works and, in addition, the significant reduction of the Brazilian economic activity directly affected the traffic of vehicles and passengers”, says the communiqué.

The company still alleges financial loss and says that, between the beginning of the concession and December 2020, it lost BRL 1.1 billion.

With devastated cash, the concessionaire left a series of unfulfilled obligations. Of the 557 kilometers foreseen in the notice to be duplicated, for example, only 73 kilometers were executed.

In 2020, after joining the rebidding program, Via 040 signed an amendment to the contract, establishing a new deadline for the company to continue managing the highway.

The expectation was that during this period the government would carry out modeling studies and establish the conditions to carry out a new auction transferring the BR-040 to another concessionaire.

But that did not happen and, two years later, in February 2022, ANTT approved the extension of the additive term for 18 months, with a final deadline of August 18, 2023.

With less than 20 days to go before the deadline, and without a new tender in sight, the MPF (Federal Public Ministry) filed a public civil action on August 1 asking that Via 040 be obliged to continue essential services until completion of the re-bidding process.

The intention is to avoid the abandonment of the section. In the opinion of the MPF, the termination of contractual relations is illegal and may harm public property and the rights of road users.

In an attempt to reach a consensual solution, a hearing with Invepar and ANTT was scheduled for the last 10th, at the Federal Court, in Belo Horizonte. But the meeting ended without agreement.

A second attempt at a hearing took place this Wednesday afternoon (16)-again without consensus.

According to a person directly involved in the negotiations, the concessionaire’s proposal was: to use R$ 125 million in amortized tariff to pay for the provision of services for another six months (until February). ANTT would have refused.

With the impasse, the decision on the future of Via 040 will be taken by the TRF (Federal Regional Court) of the 6th Region until the sixth.

The expectation of those involved is that the Justice accepts the MPF’s request for the concessionaire to remain for a few more months.

Sought, Invepar said it does not comment on lawsuits that are being processed in court.

In a note, ANTT said that the hearing promoted by the MPF did not result in an agreement, but that it continues to maintain a dialogue with the concessionaire about the management of the highway.

“The agency points out that, as soon as there is a decision on the conduction of the stretch, the information will be widely disseminated.”

BR-040 is one of the problematic concessions

Via 040 is one of the infrastructure assets that have been called “stressed concessions”. On this list are airports, highways and railroads that have come to be managed by the private sector in recent years and today have a serious financial imbalance, which practically makes the operation unfeasible.

This group includes the airports of Galeão, in Rio de Janeiro, and Viracopos, in Campinas. The Rumo Malha Oeste railroad and four other highways are also being auctioned: Arteris Fluminense, Eco101, MSVia and Concebra.

A good part of the stressed assets was granted to the private sector during the government of President Dilma Rousseff (PT). In the case of roads, most troubled assets were auctioned in the so-called third stage of the road program.

Entrepreneurs and specialists point out that the concessions at that time ended up being frustrated by the financial crisis that started in 2014, by Operation Lava Jato, and mainly by problems in the modeling of contracts —which required massive investments from operators in a short period and anticipated a demand much greater than came to fruition.

“There was talk of end-to-end duplication in a short period of time, this also made the cash flow of these projects very vulnerable to macroeconomic changes. And these changes came”, says Marco Aurélio de Barcelos, CEO of ABCR (Brazilian Association of Highway Concessionaires).

The rebidding mechanism —sanctioned in 2017 and regulated in 2019— was a way of trying to solve the problem of these assets. Through it, the federal government can establish conditions for a new auction to be held. Until then, the concessionaire must remain ahead of the contract.

However, rebidding has proven to be a complex and time-consuming instrument. Since the law was approved, only one asset has gone through this process: Natal airport, in May of this year.

In an attempt to resolve the problem of stressed concessions more quickly, the government wants to avoid this path. The desired solution is to renegotiate the terms of the contracts with the administrators themselves, so that they remain at the forefront of the business.

This alternative gained legal legitimacy in recent weeks, when the TCU (Union Court of Auditors) authorized operators to give up returning their concessions. In practice, the decision authorizes alternative solutions if there is consensus between government and companies.

The Transport Ministry already has four working groups to discuss consensual exits for highways. The issue is considered a priority by the portfolio and the intention is to bring the contracts to regularity, allowing the resumption of investments that are currently at a standstill.

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Federal highways in rebidding

Fluminense Highway

Dealership: Arteris

Section length: 320 km

Awarded in: 2008

Concession term: 25 years

eco101

Concessionaire: Ecorodovias

Section length: 475.9 km

Awarded in: 2013

Concession term: 25 years

MSVia

Dealership: CCR

Section length: 847.2 km

Granted in: 2014

Concession period: 30 years

Route 040

Concessionaire: Invepar

Section length: 936.8 km

Granted in: 2014

Concession period: 30 years

Conceive

Concessionaire: Triunfo

Section length: 1,176.5 km

Granted in: 2014

Concession period: 30 years

Source: ANTT (National Land Transport Agency)