Renan Filho: spending ceiling caused a drop in investment – 03/21/2023 – Market

The Minister of Transport, Renan Filho, attended the Senate this Tuesday (21) and, in an audience with parliamentarians, stated that the spending ceiling caused damage to investment in infrastructure in Brazil.

According to him, the national panorama on this subject has been getting worse in the last eight years, since 2014, due to the crises in the global economy, Brazilian politics and, more recently, the pandemic. But, he argued, the industry’s main hurdle was the cap, set in 2016.

“[O investimento em infraestrutura vem caindo] in the last eight years, but especially in the last six, when we live here in the fiscal organization regime marked by the spending ceiling”, he said.

“The PEC of the transition cannot be a chicken’s flight and we be imprisoned again by the hanging in the investments that promoted the expenditure ceiling”, he affirmed.

The minister praised the mechanism approved in December 2022, which raised the ceiling for 2023 by BRL 145 billion and provided for an additional BRL 23 billion not subject to the rule for investments, among other flexibility. The text also predicted that the new government should present a new fiscal rule to replace the current one this year.

President Lula (PT) indicated this Tuesday, however, that the government will not be in a hurry to present the new fiscal rules, which should be made public only after the return of the presidential trip to China, from March 26 to 31.

Lula stated that the package cannot be announced this way, before he and Minister Fernando Haddad leave on a trip and without providing the necessary clarifications. However, the president stressed that the proposal is already “mature”.

“We have to discuss a little more. We don’t have to be in a hurry that some people in the financial sector want,” said Lula, in an interview with the Brasil 247 portal.

The president’s statement comes amid the prospect of announcing the new fiscal rule, a set of rules that aims to replace the spending cap. The general guidelines were presented by Minister Fernando Haddad (Finance) to the president on Friday (17).

The issue is also being discussed this Tuesday morning (21) within the scope of the JEO (Budget Execution Board), formed by ministers Haddad, Simone Tebet (Planning and Budget), Rui Costa (Civil House) and Esther Dweck (Management and Innovation in Public Services).

“If we go back to a pre-PEC Transition investment capacity, we will certainly not be able to stop the deterioration of our transport infrastructure”, said Renan Filho to the senators.

According to him, the breaking of the ceiling allowed over R$ 14 billion for the sector this year, and the expectation is to start the process of reversing the investment curve, which is currently descending.

According to Renan Filho, the infrastructure situation in the country is receding, due to the ceiling, which caused a drop in investment in the sector. He called the moment the country is currently experiencing in this area a “lost decade”.

“We are seeing works that never end, paralyzed works, we are seeing roads that were made of asphalt and are now made of clay”, he said. “These things happen because there was a reduction in the investment capacity in Brazil, public and private”.

He also defended works with an environmental impact, such as paving the BR-319, and stated that it is necessary to find a solution to reconcile the “competitiveness” of the infrastructure with “sustainability”.

Renan Filho also stated that his goal is for 40% of the country’s logistics to be operated by railroads (today, it is around 13%, according to him), and countered charges for the delay in the progress of works at the beginning of the government.

“I’m a fast-paced guy, I want to try to do things too, but infrastructure work is not like microwave popcorn, which we put in and then do ‘pap-pap-pap’ and in five minutes it’s ready”, he replied. .

As shown to Sheethowever, the government’s performance in the area of ​​infrastructure, and transport in particular, has been leaving investors in doubt and generating delays in project schedules.

The situation affects highways, ports and airports and is linked to political and ideological disputes.

The PT’s orientation against privatizations paralyzed the project to transfer the port of Santos to the private sector, as well as the last airports of the state-owned company Infraero. The performance of the party’s president, Gleisi Hoffmann, has still stalled the concession of highways in Paraná.

Also on the advice of the government, Minister Márcio França (Ports and Airports) ruled out that concessionaires could fulfill their obligations with the government using precatorios (debts to be paid by the State to taxpayers, after a court decision). The mechanism was created by constitutional amendment and its veto generates concern in the sector.

On the highways, the president of the party, Gleisi Hoffmann, is the protagonist of one of the biggest political clashes using her influence in the government to modify a project of the governor of Paraná, Ratinho Junior (PSD).

The clash involves the Minister of Transport, Renan Filho (MDB-AL), and the Civil House over the concession of more than 44,000 km of highways in Paraná. The project should require investments of more than R$ 90 billion.

Earlier this month, details of the project were to be announced at an event with the governor, but it was canceled at the last minute. According to advisers, the agreement would be disclosed for the first two batches of highways —out of a total of six— to be auctioned. Both have already been approved by the TCU.

This announcement was made after several meetings between Minister Renan Filho and the Civil House.

This week, the deputy governor of Paraná, Darci Piana (PSD), sent a letter to the minister asking him to speed up the concession. The matter, still according to advisors, ended up on President Lula’s desk.