|Café Brazil: FT Latin America Agenda|
||06/23/08 02:48 PM |
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3 Brownie Points
| Figures due to be released this week by Abdib, Brazil's infrastructure and basic industries association, show that investment in infrastructure in the country is reaching new levels. After rising steadily from R$53.6bn ($27.5bn) in 2003 - Abdib's figures are at constant 2007 prices - to R$72.3bn last year, investment is set to reach R$84.4bn this year and R$86.6bn in 2009. The increase is encouraging but not enough to meet demand. According to Paulo Godoy, Abdib's president, Brazil - even by the most conservative estimates - needs to spend at least R$108bn a year on infrastructure, including transport, electricity, oil and gas, telecommunications and water and sewage. Failure to bring investment up to the required level will cause irrecoverable damage to productivity and social well-being. "The losses are exponential," he says. Nevertheless, the fact that investment is creeping up should be welcomed. Some credit goes to the government's spending programme, known as the PAC, although very few of the PAC's projects have so far got off the ground. But one major advance could be on the way. Carlos Minc, the new environment minister, has told Roberto Messias Franco, the new head of Ibama, the federal environment agency, that he has one month in which to produce a new, streamlined licensing system. The aim is to cut bureaucracy, increase transparency and put the whole licensing system in line, reducing the time it takes to grant environmental licenses to less than six months. |
That would be a huge advance. A giant hydro-electric dam being built on the Tocantins river at Estreito, which is the biggest construction project under way in Brazil, was held up for five years because of delays in issuing permits. But licensing is not the only problem. Last week local prosecutors managed to halt work at Estreito, saying the scope of Ibama's study didn't go far enough. If the injunction isn't lifted in time to allow the current stage of construction to be completed during the dry season that runs to October, the plant will be held up for at least another year.
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