Thursday, February 25, 2021

Infrastructure investments grow in Brazil, but lack planning

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Even with an unfavorable political and economic scenario, investments in infrastructure and industry works in Brazil total R $ 71.2 billion in the period from 2021 to 2026 – a growth of 24.7% compared to the period from 2020 to 2025. The numbers of the study “Perspectives of the Infrastructure Market 2021 – 2026”, by Neoway consultancy, granted exclusively to EXAM, and include works in progress and expected to be completed by the last year of the period indicated.

The increase in these numbers is driven by the transport and urban roads sector and the energy sector, which account for 40% and 30%, respectively. The construction of wind farms, thermoelectric plants, subways and highways concentrate most of the investments. “In the energy sector, investments continue to converge to wind energy, which is continuously growing as the country’s energy matrix”, points out the report.

Even during the coronavirus crisis, governments did not even cancel or postpone major projects – which helps to understand the growth in numbers even in an adverse scenario, as explained by Jamila Rainha, product manager at Neoway, who monitors construction companies and construction sites of the national real estate, infrastructure and industrial segment.

“For this period there is a forecast of large-scale works such as those on the São Paulo Metro – the extension of Line 2 Green to Penha -, which is authorized by the state government and is scheduled to be delivered between 2025 and 2026”, he explains the executive. “Other examples of contributing factors are projects such as the Metrô Orange line and large industrial projects in the paper and cellulose area, which continue to drive investments in this sector.”

Although some of these works are at an early stage and depend on a complexity of factors to be carried out in the expected period, what the study takes into account is the projection of completion.

Many projects and intentions, but little planning and execution

The report also points to a 14% increase in investment intentions announced for the period from 2021 to 2026, totaling R $ 882.3 billion. Despite the expressive numbers, only 8% of these works in the design and intention phase are expected to start – a percentage that has increased over the years -, which means that the amount of investment in play is real, but the execution depends on will, political priority and strategic planning.

The disclosure of the forecast for the beginning of the work indicates, even if imprecisely, that this project is part of government planning, thus having a greater probability of being carried out. An increase in the number of projects announced without a start date demonstrates that successive governments maintain the propensity to publicize new infrastructure works projects across the country without strategic planning and execution schedules.

Jamila Rainha, project manager at Neoway Consulting

As with construction in progress, the transport and urban roads sector concentrates investment intentions (48.3%), followed by the energy sector (20.9%) and industry (26.9%), the latter driven by planned contributions in the paper and cellulose area.

Regarding both works in progress and projects and intentions, the Southeast region concentrates the majority of investments – driven by the State of São Paulo -, followed by the Northeast (which concentrates half of the investments in energy generation projects) and the South parents.

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Infrastructure investments grow in Brazil, but lack planning