Toll road sector in Brazil: Regulation by contract and recent innovations

Abstract

The existing stock of road infrastructure in Brazil is still suboptimal and presents a bottleneck for economic growth. Concessions are being used to leverage the development and delivery of road infrastructure, although the first concessions have experienced some difficulties. Based on past lessons, Brazil has revised the regulatory framework and concessions models, by acting at three main critical success factors: creating a clear and transparent regulatory framework, improving procurement rules to ensure a more effective search for the “right” partner (and filtering opportunistic investors), and, finally, establishing a more effective risk-sharing strategy, providing the right incentives to mitigate delays and contractual breach, while increasing the bankability and overall project’s quality. This paper provides an overview of these changes and provides valuable lessons for academics and practitioners involved in concession design and management, particularly, in the road sector.

Barriers and solutions in adopting public–private partnerships in road transportation infrastructure projects for developing countries: results of a Delphi survey in Iran

“…This can be seen, for example, also in work by Soecipto and Verhoest (2018) on ten European countries, which shows that although the broader macrolevel business environment has a clear contribution, contract stability of PPPs regarding road projects can benefit from an availability-based remuneration scheme and a well-developed governmental PPP support in combination with other conditions. Yet, in developing countries – such as in Indonesia (Endo et al , 2021) and Brazil (Camacho and Cruz, 2022) – it has a huge weight the lack of coordination among the related stakeholders, especially between the central and local governments.…”