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PPP Contracts in Brazil

PPP Contracts in Brazil. Isaac Averbuch Madrid, October, 2009. The Brazilian Legislation. There’s a legal framework which emphasizes the transparency along the process (before and along the contract lifetime);

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PPP Contracts in Brazil

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  1. PPP Contracts in Brazil Isaac Averbuch Madrid, October, 2009

  2. 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).

  3. 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 3

  4. 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 4

  5. 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 5

  6. 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 improvethe coordination among the Government agents involved in the PPP projects – it means goals and procedures

  7. To improve the general knowledge about the PPPs as a good public management tool; Challenges for the future To remove political resistances (legitimate or not) – including the fear of the word “private”; To improveevaluation procedures and the relationship with the control institutions. 7

  8. ¡Gracias! isaac.averbuch@planejamento.gov.br +55-61-2020-4683

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