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The Project
The BR116/324 is the first federal road project to be implemented in Brazil under the framework of the federal Public-Private Partnership Law (Law 11.079, the “PPP law”), approved on December 30, 2004. The project is being studied and structured in partnership by the Ministry of Planning, Budget and Management (Ministério de Planejamento, Orçamento e Gestão), the Brazilian Development Bank (BNDES) and the IFC. Brazil is one of the few countries in Latin America that has set up a legal and regulatory PPP framework to promote private sector investments in infrastructure in collaboration with the public sector.
The project consists of a concession to rehabilitate, maintain, operate and make capacity improvements to a 680.6-kilometer section of the BR-116 and BR-324 Federal roads in the State of Bahia. The road system is composed by: (i) a 113.2 km stretch of the BR-324 highway located between the city of Salvador and the city of Feira de Santana, (ii) a 554.1 km section of the BR-116 road between Feira de Santana and the border of Bahia with the State of Minas Gerais, and (iii) a 13.3 km segment on BA-526 and BA-528 linking BR-324 to the Naval Base of Aratu near Salvador. The term of the concession will be variable, between 13 and 17 years, depending on traffic levels.
Similar to other road concessions successfully implemented in Brazil since the mid-1990s, the project aims to promote greater transport efficiency and economic growth by upgrading road infrastructure. The BR-324 stretch is already a major export and import corridor with high levels of truck traffic around Feira de Santana, and accessing the port of Aratu near Salvador. The BR-116 is a 4,500-km corridor linking the south and north of Brazil, with significant volumes of domestic traffic and export-import freight along the stretch south of Feira de Santana to Minas Gerais.
The selection of the BR-116/324 as priority project under the PPP framework shows the Government’s commitment to infrastructure development, and sets up a unique investing opportunity for local and international investors.