Brazil’s infrastructure auctions expected to draw R$24bn this month

The São Paulo state government is behind four of these six bids. The largest project is the Sorocabana Highway concession, which plans to invest R$8.8 billion in works and is scheduled for bidding on Wednesday (30). The project covers 460 kilometers of roads in the state’s southwest, including sections of the ViaOeste concession, currently operated by CCR, which is set to expire.

Market expectations point to fierce competition among major players. “This is a brownfield asset [already in operation] that has proven to be significant in terms of revenue generation,” said Rafael Vanzella, a partner at the law firm Machado Meyer.

As the current operator of ViaOeste, CCR is seen as a strong contender. However, sources following the matter indicate that other companies, such as Pátria and Ecorodovias, are also evaluating the project. Starboard, which operates sections of the Rodoanel—a beltway around São Paulo urban area—, and EPR are among potential bidders too.

The federal government is also planning a highway concession auction on Thursday (31), the day after the São Paulo auction. This will be for the Rota do Zebu, which covers the BR-262 highway stretch between Uberaba and Betim (both in Minas Gerais), with investments totaling R$4.4 billion.

In the sector, bids from less traditional companies are expected. One interested party, according to sources, is the Vetor Norte consortium, made up of mid-sized construction firms, which competed in the BR-040 highway auction in Minas Gerais. Other companies analyzing the asset include 4UM (formerly J.Malucelli) and EPR, which already holds concessions in Minas Gerais and could benefit from synergies, sources say.

According to Letícia Queiroz, a partner at the law firm Queiroz Maluf Advogados, the closing timing of the auctions won’t negatively impact the bids. “Despite the coincidence, the profiles are different. Sorocabana is likely to attract larger groups. Not that Zebu wouldn’t interest them, but it’s also suitable for mid-sized players,” she said.

When contacted, CCR said that it analyzes opportunities “selectively.” Pátria and 4UM declined to comment. Ecorodovias said it evaluates projects “selectively.” Starboard’s Via Appia mentioned that it “constantly evaluates participation in new auctions.” EPR said that it has a discipline of “assessing opportunities.” Vetor Norte could not be reached for comment.

Another major auction scheduled for Wednesday (the same day as Sorocabana) is for the water and sewage concession in Piauí, which is expected to generate R$8.6 billion in investments, along with a minimum payment of R$1 billion. The project covers all 224 municipalities in the state, though three of them—Teresina (operated by Aegea), Landri Sales, and Antonio Almeida—would only be included once their current contracts end.

This is the government’s second attempt to hold the auction. The first, in August, was canceled due to a lack of bids. At the time, the main concern of companies was the requirement for the entire payment to be made upfront before the contract was signed. In the new terms, the payment has been divided into installments.

Now, the government is optimistic that the auction will succeed. “We are confident that there will be proposals. The only request was to split the payment, and we’ve done that,” said Samuel Nascimento, Piauí’s secretary of administration.

According to him, Aegea and Iguá are studying the project. Equatorial, which operates the state’s energy distributor, also held discussions but has not indicated if it will participate. When contacted, Aegea said it “monitors new opportunities,” which are “analyzed on a case-by-case basis.” Iguá stated that it “constantly evaluates new opportunities.” Equatorial did not comment.