Decree regulates brazilian contracts relicitation of highway, railway, and airport

The Federal Government published Decree No. 9,957 on Wednesday (08/07), which regulates the Brazilian contracts relicitation of  the road, rail, and airport sectors. Law 13,448, of June 5, 2017, already established general guidelines for the brazilian relicitation of contracts, but there was a need to specify the procedures for their implementation.

Relicitation is an innovative alternative to lengthy legal disputes, where users are normally penalized, says Infrastructure Minister Tarcísio Gomes de Freitas. “With the decree, until the conclusion of the relicitation and the signing of the new partnership agreement, the former concessionaire must ensure the continuity of the provision of essential services, under contractual penalties,” says Freitas.

According to the text of the 2017 law, relicitation is a procedure that involves the friendly termination of the partnership agreement and the conclusion of a new business adjustment for the venture, under new contractual conditions and with new contractors, by means of the bidding promoted for this purpose. With the publication of Decree No. 9,957, of August 6, 2019, it will be possible to relicitate partnership contracts that are not being properly fulfilled or whose partners demonstrate an inability to honor the obligations assumed contractually.

The main advantage of the mechanism is to ensure continuity and regularity of service delivery, without prejudice to users. To this end, the decree establishes ways to safeguard the investments made by the original contractor, avoiding interruption of services by lawsuits, and also termination of the contract by expiry. The measure also brings more security to future investments in concession projects.

The request for relicitation must be formalized and justified by the original contractor to the competent regulatory agency, observing the other requirements expressed in Decree 9.957. The formal request will be processed and reviewed by the regulatory agency and subsequently by the Ministry of Infrastructure. The relicitation process, with the manifestations of the agency and the ministry, will be submitted to the deliberation of the Council of the Investment Partnership Program (PPI) of the Presidency of the Republic, prior to the deliberation of the President of the Republic.

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