Rodoanel de SP: Via Appia consortium wins auction – 03/14/2023 – Market

The Via Appia Fundo de Investimento em Participações consortium was the winner of the auction for the completion of the works on the northern section of the Rodoanel, held this Tuesday afternoon (14) at the headquarters of B3, in São Paulo.

A 23.1% discount was offered on the amount expected to be paid by the government of the State of São Paulo, as a public contribution for the completion of the works, which could reach up to R$ 1.4 billion.

As the toll value should not be enough to adequately remunerate the concessionaire, the government committed to making payments in installments to offset the expenses of the winning consortium.

Thus, the PPP (Public-Private Partnership) model established as a criterion for deciding the winner of the auction the consortium that offered the highest discount on these annual installments, estimated at R$ 51.4 million per year.

Two participants, however, offered proposals that provided for the full compensation of this consideration —in addition to Via Appia FIP, the Infraestrutura SP consortium, formed by the companies EPR 2 Participações and Voyager Participações, also proposed a 100% discount.

With that, the dispute moved into a second phase, which took into account the greater discount on the public contribution expected to complete the work, another payment to be made by the government. Via Appia proposed discounting 23.1%, and surpassed Infraestrutura SP, which would discount 5.11%.

The SP Flow consortium, led by XP, and Acciona also competed in the auction, but they offered discounts on the consideration of 60.03% and 12.90%, respectively, and did not pass to the second phase of the dispute.

The event was even suspended by the Justice on the eve of the scheduled date, but the government of São Paulo managed to overturn the injunction. The decision was made by the President of the Court of Justice (TJSP), Judge Ricardo Anafe.

The conditions announced provide for a concession period of 31 years, with an estimated investment value of approximately R$ 3.4 billion, according to the notice published in August last year.

Of this amount, approximately R$ 2 billion should be allocated to the completion of the works, with the remainder used in the operation and maintenance of the highway, which will be supervised by Artesp (Transport Agency of the State of São Paulo).

The winner of the dispute will have about three years to complete the works, with the works expected to be delivered in June 2026. The government predicts that, with the North section in operation, there will be a reduction of 30,000 trucks and 54,000 cars in the Marginal Tiete. The last remaining stage of the ring road is 44 km long, covering the municipalities of Arujá, Guarulhos and São Paulo.

An auction for the northern section of the Rodoanel was scheduled by the previous government of Rodrigo Garcia (PSDB) for the month of April 2022, but was suspended one day before the scheduled date.

According to the government at the time, the decision was due to “uncertainties generated by the internal and external macroeconomic scenario and high input prices, responsible for the highest inflation in civil construction in the last two decades in Brazil”.

To increase interest in the project and avoid further suspension of the auction, the government increased the internal rate of return offered to investors from 8.93% to 9.99% per annum.

“There was a great maturation of the business conditions, and the government yielded a lot because it needs to guarantee interested parties”, says Ricardo Levy, partner in the infrastructure area of ​​the law firm Pinheiro Neto.

Levy adds that, in a scenario of high interest rates like the current one, the work of convincing people to attract companies interested in participating in a very long-term business that requires billionaire investments is even more challenging.

“The government did nothing to favor the companies, but simply to manage to create attractiveness for the business”, says the Pinheiro Neto partner.

According to Levy, aspects related to the economic-financial balance during the 30 years of the project, as well as to any —and likely— disagreements between the private sector and the public authorities regarding the state of the works and the need for investments were addressed in a to break down resistance and attract interested parties to the auction.

The extension of the deadlines initially established for the phased delivery of works, and even contractual termination, are provided for in the PPP model, points out the expert.

Benini preferred not to dwell on how much work is still needed to complete the north section of the Rodoanel, but estimates at the time of work interruption five years ago pointed to a percentage of around 85% of work already completed.

The construction of the Rodoanel’s northern section began in mid-2013 and has been paralyzed since 2018. The last time the Rodoanel was idle for so long was between 2002 and 2007, a gap between the construction of the West and South sections.

The work for the North section was initially budgeted at BRL 4.3 billion, but, by 2019, it had already consumed around BRL 6.85 billion, having become the target of an investigation due to suspicions of overbilling and corruption.

The contractors that were part of the consortia, such as Coesa (formerly OAS) and Mendes Júnior, were financially hit hard by Lava Jato, entering into judicial recovery and being declared unfit by the Union.

On Friday (10th), Coesa even presented a writ of mandamus to try to suspend the auction, but had the request denied by the Justice. The company even tried to suspend the auction through a challenge request at the TCE-SP (São Paulo State Court of Auditors), but which was also denied. The developer alleges that it is entitled to compensation owed by the state for the investments it made in the work.

“The indemnity [à Coesa] for the construction of the Rodoanel is still under judicial discussion”, says Benini. Coesa “is trying to confuse things”, adds the secretary.

According to the projected model, the north section of the Rodoanel will not have toll plazas, with toll collection taking place through sensors that calculate the amount due based on the mileage of each vehicle. The initial forecast is that the rate will be R$ 0.15 per kilometer traveled. “It is the first project born without a toll plaza in Brazil”, says the secretary.

For drivers with the tag device, the toll will be charged by the device itself. For those who do not have the device, it will be necessary to access the concessionaire’s website to make the payment, within a period of up to 15 days after the traffic on the highway. After this interval, a bank slip will be sent to the driver for the debt to be settled. If payment is not made on time, a toll evasion fine will be issued.

In all, the ring road is about 176 kilometers long. The first stretch opened was the West, in 2002, followed by the South, in 2010, and the East, in 2014.