Government Plans to Raise Over R$ 20 Billion in Privatisation and Concessions in 2017

07/04/2016 - 11h05

Hoping to reduce the large losses in the public accounts next year, the Minister of Finance, Henrique Meirelles, and his team have announced a huge planned programme of future privatisation and concessions.

Calculations predict that the scheme will raise between R$20 billion (US$ 6.2 billion) and R$30 billion (US$ 9.2 billion) for the National Treasury in 2017.

The economic team said they are aiming to end the next year with a much lower primary deficit than that which is expected for 2016, a figure that will be somewhere around the R$170.5 billion (US$ 52.6 billion) mark. They also said that in 2018 the aim is to improve even further on this loss.

Doubts are being voiced from within Temer government regarding how much the Union looks to lose next year. Without any new measures to increase funds, Meirelles' team stated that there was a risk the Union's deficit would be no lower next year than this year.

According to a presidential aide, the concessions and privatisation programme will have to generate "an effective cash flow into the Treasury" of around R$20-30 billion in order to shrink the hole in the federal government's budget.

Temer's team is still drafting its list of entities that can be privatised and conceded to the private sector. Plans are already in the pipeline, however, for the sale of the mortgage-lender Caixa Seguridade and the reinsurance company IRB, as well as shares in air-travel company Infraero, and concessions of motorways, ports and airports.

TAKING STOCK

Last week, during a team meeting, the interim president asked his Ministers to take stock of their holdings, to separate "everything that could be privatised or conceded to the private sector."

The government has already decided, however, not to place anything on sale until the final verdict on the impeachment of suspended President Dilma Rousseff. Only once the case is concluded, and Temer is officially sworn in to office, will the government give the green light on this operation.

Translated by GILLIAN SOPHIE HARRIS

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