May 23, 2014 / 2:16 PM / 4 years ago

Brazil's Galvão Engenharia wins toll rights to local highway

SAO PAULO, May 23 (Reuters) - Local firm Galvão Engenharia won the rights to operate a stretch of highway in two Brazilian farm states on Friday, though bidding was less competitive than in other recent road auctions aimed at improving the country’s infrastructure.

Three groups bid to operate 629 kilometers (390 miles) of the so-called BR-153 in Goiás and Tocantins states for 30 years with a total expected investment of $4.31 billion reais ($1.94 billion).

Galvão Engenharia offered to charge 45.99 percent less than the maximum toll proposed by the government, a much larger discount than competing firms offered. Triunfo Participações e Investimentos SA proposed a 0.99 percent discount, while the third bidder, a consortium that included Ecorodovias Infraestrutura e Logistica SA, offered 21.49 percent.

Galvão Engenharia plans to charge a toll of 0.04979 reais per kilometer on the road used to transport soybeans, corn and rice.

President Dilma Rousseff’s government is finally convincing reluctant private companies to invest in roads and airports after years of efforts, but the BR-153 saw fewer bidders than other recent road auctions.

A stretch of highway between the capital Brasilia and the port of Rio de Janeiro in December received eight offers, and six groups bid on a stretch of the so-called “soy road” in Mato Grosso do Sul state.

Friday’s auction was less attractive because the BR-153 runs parallel to the North-South Railway, which may eventually compete with the road as a means to transport soy and corn to new ports being built in northern Brazil, analysts at Credit Suisse said in a report on Thursday

Rousseff hopes to bolster a sluggish economy with new infrastructure investment and also streamline the export of commodities like soybeans, corn and iron ore that pad the trade balance in Latin America’s largest economy.

$1 = 2.22 reais Reporting by Roberta Vilas Boas; Writing by Caroline Stauffer; Editing by Nick Zieminski

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