Almeida Advogados regularly assists public and private companies engaging in privatization and transportation-related projects.
Presentation made by the attorneys Iris Bennett, Partner of the US Law Firm Smith Pachter McWhorter PLC, and her associate Paulo Gusmão, together with André de Almeida and Leonardo B. Leite, partners of Almeida Advogados.
According to the Executive Report of the National Plan of Logistics and Transports, the Brazilian transportation industry primarily depends on highway transportation, which accounts for 58% of commercial payload transports and 95% of passenger transportation in Brazil. By contrast, railway transportation makes up (as a percentage of payload market-share) 25% and marine transportation 13%, while pipeline and air transportation account for approximately 3.6% and 0.4%, respectively.
As the report indicates, transportation costs constitute approximately 32% of logistics expenses, thus demonstrating the importance of efficient transportation systems for economic development.
According to a World Bank study, transportation costs continue to make Brazilian exports increasingly competitive.
On the domestic market, competition is affected by high logistics costs, which hampers the economic development of less-developed regions, as well as those located on the agricultural frontier (Brazil’s North and Northeast), given insufficient means of transportation. That same study calculates annual losses arising from insufficient infrastructure at US$ 1.3 billion.
Based on the above-referenced report, a more extensive transportation sector in Brazil could reduce transportation costs by approximately US$2.5 billion per year.
However, even the Brazilian government discounts a short-term improvement in transportation options, given the significant public investments required and current lack of funds for those projects.
Despite challenges to the contrary, the future of Brazil’s infrastructure lies in improving its federal highways, which are important for transporting both cargo and people.
Given the federal government’s goals, the transportation industry has begun an important restructuring process that will generate demand for new privatization and concession projects for transportation in Brazil.
Almeida Advogados has experience in structuring of transportation projects, including the development of projects involving bidding, permits and public and private partnerships (PPPs).