Government announces concession for Piracicaba-Panorama Highway

The government announced international concession of the Piracicaba – Panorama Highway, with expected investments of R$14bn. The tenure of the contract is 30-years. The contract covers a total of 1,273 kilometers of highways for modernization and expansion between the city of Piracicaba, in the Campinas region, and the municipality of Panorama, in the far west of the state, bordering Mato Grosso do Sul. Of the total R$14bn in investments, about R$1.5bn will be invested in the first two years of the contract.

The Piracicaba – Panorama lot consists of a 218 km network, currently operated by the Arteris Group’s Centrovias concessionaire, whose contract expires early next year, in addition to 1,055 kilometers operated by DER-SP, which will receive all modernizations of the Road Concessions Program of the São Paulo State Government. Investments will be made in the SP-304, SP-308, SP-191, SP-197, SP-310, SP-225, SP-261, SP-293, SP-331, SP-294, SP-284, and SP-425 highways, directly benefiting 62 municipalities within this network.

Among the planned interventions are 600 kilometers of duplication and new tracks (the urban contours). There will also be additional lanes and marginal roads, among other works that improve the flow, the circulation of regional production, and road safety. Other implementations include shoulders, new access and return roads, pavement recovery, walkways, and bike paths. The project also foresees that every four years revisions will be made that may adjust new investments in the tracks.

Tariff innovations

The notice foresees innovations from the economic, technological, and road safety point of view. The tariff model of the new bid leads to a kilometer tariff that is 23% lower than that currently practiced by Centrovias. There will be a 5% discount for automatic payment users. In addition, the major new innovation of the new concession is the Frequent User Discount (DUF), a new model in Brazil that will benefit drivers who use the road more often, especially residents of small towns that use the highways daily to access the trade and services network of neighboring municipalities.

Users of category 1 vehicles – passenger cars and urban cargo vehicles – will also have benefits. Within one month there will be progressive discounts on each ticket, depending on the direction of travel, up to the limit of 30 trips – the following month discounts are started again. In practice, each ticket at the toll plaza becomes cheaper within the month and there are cases where the fare on the 30th ticket may be discounted at around 90%. Frequent users can have significant monthly savings and, if they use the roads daily, will pay an average that is very close to the distance traveled.

International competition may include domestic, foreign companies, investment funds, and private pension entities – alone or in the consortium. The criterion for judging the bid will be the highest fixed grant value. Aiming to favor investments and lower toll rates, Governor João Dória determined the adoption of a lower fixed grant amount, whose minimum value was reduced from a potential of R$2bn to only R$15m. In the end, the new lot of road user will have reduced fares and many investments.

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