Economic Advisory – PPP Unit
PPP Contracts in Brazil
Isaac Averbuch
Madrid, October, 2009
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Economic Advisory – PPP Unit
The Brazilian Legislation
There’s a legal framework which emphasizes the
transparency along the process (before and along the
contract lifetime);
The legislation provides also some definitions about
fiscal balance, including States and Municipalities;
It was created a Federal Guarantee Fund to offer more
liability to the entrepreneurs (Federal level only).
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Economic Advisory – PPP Unit
The Brazilian Legislation
The legislation addresses all these points:
• Selection of projects;
• The steps until the bidding;
• Rules for the contracts (amount, term, clauses...);
• Follow up after the formal contract;
• Guarantees
• Division of risks
• Resolution of contracts
• Calling for proposals
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Economic Advisory – PPP Unit
The Brazilian Legislation
The legislation addresses all these points:
• Fiscal restrictions;
• Possibility of arbitrage in disputes;
• Step in rights for financing institutions;
• Rebalancing of contracts;
• Updating of revenues
• Good degree of freedom for the entrepreneurs
• Rules for payment by the Government (output based)
• Reversion of investments by the end of contract
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Economic Advisory – PPP Unit
Results by now
Even with very few contracts, the PPP legislation
and studies brought some good results for the
Brazilian Government and society:
• The case of “Seven Lots of Highways”
• The modernization of irrigation projects
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Economic Advisory – PPP Unit
Challenges for the future
To change the wrong perception of some important
policy makers about the “excessive complexity” of
PPPs, which “take so long time” to a project
become real.
To implement, in concrete, the legal determinations
about selection of projects – consolidate the
institutions;
To improve the coordination among the Government
agents involved in the PPP projects – it means goals
and procedures
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Economic Advisory – PPP Unit
Challenges for the future
To improve the general knowledge about the PPPs as
a good public management tool;
To remove political resistances (legitimate or not) –
including the fear of the word “private”;
To improve evaluation procedures and the relationship
with the control institutions.
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Economic Advisory – PPP Unit
¡Gracias!
[email protected]
+55-61-2020-4683
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