Brazil is Planning Toll-Free Highway Concessions Report image

In 2012 Brazil sold concessions for the expansion and operation of three major airports and a highway and now it prepares to sell 10-year highway maintenance contracts without tolls.

After the shadow-toll model for highway concessions has been successful in several countries, the government expects to sell the shadow-toll concessions for the upkeep and improvement of some of its federal highways thus year. The shadow-toll derives its name from the transfer of the cost of a highway’s improvement and upkeep to the taxpayer rather than the actual user of the road.

The majority of the federal highways lack sufficient traffic to attract investors. For the new action model under design the government is willing to pay the lowest bidder for the operation and improvement of federal highways.

The disposable income among Brazil’s middle class grew, and also the auto sales, which had as result an increase in the use of highways under concession at many multiples above the expansion of GDP in recent years. The government raised $14 billion by selling concession rights to private investors to upgrade and operate three of the country’s main airports, earlier this year.