Government launches concession tender for “pulp highway”

The government of Mato Grosso do Sul, in partnership with the federal government, plans to auction off a block of highways totaling 870 kilometers on December 2, with expected investments around R$6 billion. The project’s tender was published on Monday (September 23).

The package includes both federal and state highways: MS-040, from Campo Grande to Santa Rita do Pardo; MS-338, from Santa Rita do Pardo to the junction with MS-395; MS-395 to Bataguassu; BR-262 from Campo Grande to Três Lagoas; and BR-267 from Nova Alvorada do Sul to Bataguassu.

The contract is dubbed “Pulp Highway” as it includes key routes for the state’s pulp industry. In the vicinity of these highways, the city of Três Lagoas already hosts plants from producers Eldorado and Suzano, with new projects underway near Campo Grande, such as Arauco’s upcoming facility in Inocência and Suzano’s newly opened unit in Ribas do Rio Pardo. The project also benefits the industrial sector in the Campo Grande region, according to studies.

Planned construction includes 116 kilometers of dual carriageways and 251 kilometers of additional lanes. The concession also anticipates around R$3 billion in operational costs over the 30-year contract period.

The project’s internal rate of return, a crucial factor in attracting investors, has been set at 10.37% per year.

The auction criterion is the lowest toll rate for users. The maximum rates specified in the tender are R$0.1613 per kilometer for single carriageway sections and R$0.2258 per kilometer for dual carriageway sections (prices as of October 2023).

Although the project is a partnership between the state and the federal government, the state government will be the granting authority, and the auction and regulation will be overseen by the Mato Grosso do Sul State Agency for the Regulation of Public Services (AGEMS).

Reporting by Taís Hirata for Valor Econômico

Source: Valor International

Sharing is caring!