By Roberta Vilas Boas
SAO PAULO Dec 17 Brazilian toll road operator
CCR SA on Tuesday won the rights to operate a stretch
of highway in the South American country's soy belt, as the
government seeks private companies to help improve
infrastructure and ease commodities exports.
Six groups bid for rights to the 847-kilometer (526-mile)
road, known as BR-163, in Mato Grosso do Sul state. The rights
to operate BR-163 are for 30 years and should attract
investments of up to 5.69 billion reais ($2.45 billion).
The auction is a sign President Dilma Rousseff's government
is finally convincing reluctant private companies to invest in
roads, ports and airports, after failing to lure them since
taking office in January 2011.
Her government is speeding up environmental licensing,
extending more loans and raising estimated rates of return on
the projects to lure investments.
The result of this and past auctions "supports our view
that, if returns are compelling, they will attract more
competitors, and the livelier competition will automatically
drive returns down," said Renata Faber, an analyst with Itaú
BR-163 is the main road link through Brazil's fast-growing
farm state of Mato Grosso to ports, which gives it considerable
revenue potential. Brazil relies almost entirely on trucks to
get some 20 million tonnes of corn and 25 million tonnes of soy
to market each year. Heavy trucks make up 60 percent of total
traffic on the stretch that was auctioned on Tuesday.
"The road has a very large growth potential," Leonardo
Vianna, CCR's director of new business, told reporters. CCR had
studied traffic on the highway for three years, he added.
CCR offered a 52.7 percent discount to the maximum toll
proposed by the government, handing the São Paulo-based company
its first win in four road auctions this year.
CCR's offer was a toll of 0.04381 reais per kilometer, about
15 percent lower than second-ranked Ecorodovias Infraestrutura e
Logística SA's bid.
Shares of CCR, which also operates the busiest highway
linking Brazil's two most populous cities, São Paulo and Rio de
Janeiro, rose 1.7 percent to 17.23 reais on Tuesday afternoon.
According to Itaú BBA's Faber, CCR took advantage of this
auction to stretch out the duration of the toll road concessions
it operates. Currently, 51 percent of CCR's toll-related revenue
comes from contracts that expire before 2022.
The fact that CCR bid aggressively to win the auction also
might help mitigate risks of negotiating contract amendments
with regulatory agencies in coming years, analysts added.
CCR was part of a group that won the concession for Confins
airport outside of Belo Horizonte last month, when Brazil
awarded $9 billion worth of contracts to overhaul crowded
terminals ahead of the 2014 World Cup and 2016 Olympics.
Vianna said CCR is considering bidding in a Dec. 27 auction
for rights to the BR-040 highway in mid-western Brazil.
Another Brazilian company, Grupo Odebrecht SA, beat six
competitors with a proposal to exact tolls on a 850-kilometer
stretch of the BR-163 in Mato Grosso state on Nov. 27, though it
lost out to CCR on Tuesday.
The highway stretches north to Amazon River ports in Para
state and could open a long-sought northern export route for the
country's farm sector. But even with auctions in Mato Grosso and
Mato Grosso do Sul, large stretches of the road leading to the
Tapajos and Amazon rivers are unlikely to be paved and remain
impassable much of the year.