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New Bill to Regulate the Cancellation of Concessions Made During Dilma Rousseff Administration
01/17/2018 - 11h30
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JULIO WIZIACK
FROM BRASÍLIA
ANAÏS FERNANDES
FROM SÃO PAULO
In the coming weeks, president Michel Temer ought to sign a bill regulating the cancellation of concessions made during the administration of former president Dilma Rousseff. The main clause in the bill will allow companies who take on the concession to pay off any outstanding debt.
The bill contemplates highway, railroad and airport concessions that were a part of the Investment Partnership Program (PPI) and that are currently in poor financial state.
The bill has already made its way through the office of the Chief of Staff and the Transportation Ministry and has already been uploaded on to the electronic system that president Temer uses to sign new legislation.
The legislation would also pave the way for the government to review the economic model the concession was under before selecting a new concessionaire.
If this takes place, the new investor will have to make a new bid to secure the contract.
If president Temer signs the bill in its current form, this would mean that the former concessionaires would be indemnified based not on the return on investment, but on the actual amount invested.
These calculations would be made by regulatory agencies and all disagreements will be resolved through a court of arbitration, thus making the procedures more agile.
If old concessionaires are still involved in financing of any kind, such investments can be taken on by new investors as long financiers sign off on the transition.
The concessions in question were designed to yield the government high revenues back when the country's economy was in good shape and forecasts indicated that the economy was expanding. The country, however, plunged into a deep recession in 2014.
Translated by THOMAS MATHEWSON