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Business

Brazil in massive investment drive

Brazil has unveiled a plan aimed at drawing private investment into upgrading the nation's physical infrastructure. The program comes amid growing worries about the country's faltering growth prospects.

Brazilian President Dilma Rousseff launched a concession program on Tuesday to attract private investment worth 198.4 billion Brazilian reals ($64 billion, 56.7 billion euros) over five years to improve the South American country's roads, railways, airports and harbor terminals.

The plan foresees the construction of 4,371 kilometers of new highways, the extension of existing railway concessions and the private operation of airports in the cities of Porto Alegre, Fortaleza, Salvador and Florianopolis, according to the government.

It also includes the so-called Trans-Oceanic Railway that is intended to link western Brazil with the Peruvian port of Pisco, on the Pacific, and open a new route to export Brazil's agricultural produce to China and other Asian countries.

The government intends to attract private capital for infrastructure works to counterbalance tough public spending cuts that Finance Minister Joaquim Levy launched earlier this year.

'Laying the groundwork'

Brazilian development bank BNDES, however, would continue to have a "relevant" role in financing infrastructure building, the government said, particularly railway projects that could be funded up to 90 percent by state bank BNDES.

Planning Minister Nelson Barbosa said he expected the private sector to show an interest in these infrastructure plans, since the country needed them and they would give Brazil's productivity a boost.

"If there is demand, there will be investment," Barbosa said. "We wish to lay the groundwork for Brazil's next development and growth cycle," he added.

The program is also meant to bolster President Rousseff's popularity which has taken a hit in recent months on account of high inflation and a corruption scandal at state-run oil company Petrobras.

The government expects 66.1 billion reals in investments in highways, 86.4 billion in railways, 37.4 billion in ports and 8.5 billion in airports. Auctions for the airport concessions will start in the first quarter of 2016.

sri/hg (dpa, Reuters)

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