Edition nº 33
Paths to development
With investments in mobility and urban planning estimated at R$ 18 billion, Brazil adopts Canadian solutions in transportation and infrastructure as an alternative for growth of its big cities
To reduce the environmental, social, and economic costs of moving around and to prioritize public transportation programs that foster urban expansion are some guidelines for Brazil. Bill 166/2010, recently approved by the Infrastructure Services Commission of the Senate, foresees the implementation of a National Urban Mobility Policy, to promote and integrate transportation, along with improvements to accessibility to cities. However, this is not the only effort undertaken aiming at urban planning solutions. The federal government plans to invest R$ 18 billion in the “Growth Acceleration Program (“PAC”) of Mobility in Big Cities”, which is expected to benefit urban centers with more than 700,000 inhabitants in 18 States. For the purpose of the 2014 Soccer Cup, R$ 8 billion are being applied in Bus Rapid Transit projects - BRTs) and Light Rail Vehicles (LRVs).
This flow of projects and funds coincides with efforts undertaken by Canada to find alternatives in this field. Montreal (Quebec), for example, this year was center stage for discussions about sustainable urbanization in the future. During four days, the Ecocity World Summit 2011, held in August, attracted some 1,500 participants from 50 countries. Sustainable mobility and urban planning were two of the main topics discussed at the event, which not just by chance took place in Canada. The country has a federal policy for sustainable development, which includes improvements to the transportation system – and the adoption of renewable technologies – such as for growth.
BUSINESS EXCHANGE – In Brazil, data of “Associação Nacional de Transportes Públicos (ANTP)” shows that annual individual (paid by users) and social (paid by government entities) mobility costs are, respectively, of about R$ 117 billion and R$ 11 billion. A change in this scenario will depend on the efficiency of future undertakings. Similar concerns are debated in Canada, with repercussions in exchange activities among companies.
Bombardier Transportation is an example. Together with Brazilian companies Temoinsa and Tejofran, Bombardier is a member of the consortium that delivered to “Companhia do Metropolitano de São Paulo (Metrô)” the first refurbished train of a total of 26 compositions – and manufactures monorail systems (Innovia Monorail 300) for the Expresso Tiradentes line (in the past popularly known as “Fura-Fila”). This vehicle incorporates an innovative Bombardier Mitrac propulsion system and a reduction in energy consumption. “High capacity railroad networks, such as metro or monorail systems, are important because they can transport more than 50,000 people per hour, in each direction”, emphasizes André Guyvarch, the company’s director in Brazil.
The investment trend in the industry also reflects on the business activities of Canadian company Transoft Solutions, which develops CAD applications for transportation and infrastructure. “We observe a 35% growth in demand, with an expectation that it may reach 45% in 2001”, states Adelmo Soares Couto, the company’s representative. To attract clients, the group perfected its software to simulate vehicle maneuvering and conversion, including 3D resources. The intent is to go beyond, including the library of “Instituto de Pesquisas Rodoviárias do Departamento Nacional de Infraestrutura de Transportes (IPR-DNIT)” in the software.
In turn, Marcopolo, one of the world’s biggest bus manufacturers, launched the model Viale BRT. “Based on the differences among the country’s municipalities, we developed several configurations for passenger capacity, accessibility and platform height”, explains the director of Commercial Relations, Paulo Corso. The articulated version, for example, is 21 meters long, with a capacity of 145 people. One of the differences is the fleet management system, which, over the internet, transmits, in real time, data on route, speed, fuel consumption, and any possible problems, among other information.
Other segments benefit from new urban needs. In order for its clients to avoid losses, Allianz Seguros offers an Engineering Risk policy. “We also have other complementary products, such as third party liability, which covers damage to third parties during the execution of a project”, states Angelo Colombo, director of Large Risks. As insurance for the possibility of delivery delays, the company also offers a product called “Alop”. “Allianz covers the impact of unforeseeable events on revenues”, says Colombo.
Real estate developers and builders also actively participate in the transformation process. With 88 projects in progress, Brookfield Incorporações adheres to the worldwide trend – which is expanding in Brazil – of combining, in a same launch, apartments, office space and hotels, such as the mixed-use project Cad’O’ro São Paulo – a residential tower and another business tower – and the Punto Offices commercial center project in Vila da Penha (State of Rio de Janeiro), with bank branches, stores and schools. According to executive director Luiz Fernando Moura, the availability of credit is a pre-condition and has benefited business – the company’s financing exceeds R$ 3 billion.
Like in Canada, Brazilian banks offer the needed – and often decisive - financial support. “These operations are of the Project Finance modality, which considers revenue flows from the investments made”, says Sandro Kohler Marcondes, commercial director of Banco do Brasil (BB). This is the case of FINEM credit lines (equal to, or more than, R$ 10 million) and FINAME (for purchasing equipment), both programs of “Banco Nacional de Desenvolvimento Econômico e Social (BNDES)” and relent through BB. “The 4.8 billion in funds for the stadiums will be used for refurbishing, building and the urbanization of adjacent areas”, stresses Marcondes.
“Caixa Econômica Federal (CEF)” has a program called “Pró-Transporte”. Until September, the entity had paid-out some R$ 2 billion in loans – but expectations are that this may reach R$ 8 billion in 2011. “We will study alternatives for private initiative, allowing for more flexibility”, says Rogério de Paula Tavares, national superintendent for Restructuring and Infrastructure.
At other banks, the outlook is good too and may result in new investments by Brazilian and Canadian companies. Itaú BBA, that had a portfolio of R$ 82 billion in June of this year, bets on differentiation through capital market operations as an alternative – or complement – to official funding. “We advise clients as to the concept of a project, in the manifestation of interest vis-à-vis government entities and in auctions held, and also as related to public private partnerships (PPPs)”, concludes Rogério Hiroshi Yamashita, responsible for logistics, urban transportation and restructuring in the Project Finance area, currently handling 45 projects, valued at more than R$ 50 billion.
REFLECTION IN CONTRACTS
The high number of celebrated contracts reflects the higher number of projects in the country. Letícia Queiroz de Andrade, partner for the Regulatory Sector at law firm Siqueira Castro Advogados, assesses this growth at 25%. “We provide services for large projects, such as the expansion of the Cumbica airport in Guarulhos (State of São Paulo) and the construction of a new port terminal in Santos (State of São Paulo). Projects handled by the firm total almost US$ 2 trillion”, reveals Letícia Andrade. The Law firm Morais, Donnangelo, Toshiyuki, Gonçalves Advogados is building up a specialized team. “There will be investments due to the mega sports events and the economic phase of Brazil”, states senior partner Paulo Iacz de Morais.
Sustainable development. This is one of the concepts that approximate Brazil and Canada in urban planning. “Sustainability is a principle we seek to adopt in all our services, based on three pillars: consumption and energy sources, water cycle and water reutilization, residues and social inclusion”, states Luis Henrique Cavalcanti Fragomeni, director and the technically responsible person at Vertrag, a technical consultancy that since 2006 has been associated with the International Center for Sustainable Cities (ICSC), a Canadian organization that promotes the exchange of experience among more than 30 cities around the world. “One must improve the quality of urban infrastructure. In metropolitan areas alone, more than R$ 300 billion are expected to be invested in urban transportation in the next ten years”, reckons Fragomeni.