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ACCESSING INTERNATIONAL MARKETS

It’s all to play forInfrastructure opportunities in Brazil: FIFA World Cup 2014

HorizonteBelo

BRAZIL

BrasiliaCuiabá

Curitiba

Fortaleza

Manaus

Natal

Rio de JaneiroSão

Paulo

RIO DEJANEIRO

SÃOPAULO

Porto Alegre

Recife

Salvador

KEY

World Cup host cities

World Cup host cities withUK Trade & Investment office

Contents

Executive Summary 2

Introduction 4Infrastructure in Brazil 4Preparing for 2014 7

Sector Opportunities:

Stadia

Overview 9Host city projects 9

Airports

Overview 17Host city projects 18Additional projects 26

Ports

Overview 29National/PAC 30Host city projects 32

Railways

Overview 35National/PAC 36

Urban mobility

Overview 38Host city projects 38

Highways

Overview 50National/PAC 50Host city projects 51

Sustainable construction

Overview 52World Cup requirements: Green GoalTM 52Olympic and Paralympic Games requirements 53

Rio 2016 Olympic and Paralympic Games 54

Conclusions: Business opportunities for UK companies 55

Further information on doing business in Brazil 57

Annex: 2014 FIFA World Cup host cities key contacts 58

IT’S ALL TO PLAY FOR – INFRASTRUCTURE OPPORTUNITIES IN BRAZIL

With a population of around 185 million, Brazil is thefifth largest country in the world. Globally it is the tenthlargest economy, and it is South America’s largest andmost influential market. It is now widely consideredalongside Russia, India and China, as one of the fourmajor growing markets of the world (so-called BRICnations). With an abundance of agricultural and mineralresources, and a government that is actively encouragingforeign investment, Brazil is one of the world’sincreasingly attractive places to operate businessactivities. Despite entering recession early in 2009 strongdomestic consumption helped the economy recoverquickly and the market expectation is for an expansionof GDP of over 4 per cent in 2010.

The selection of Brazil as the host nation for the 2014FIFA World Cup provides an opportunity to show-caseitself alongside other BRIC countries in the delivery of a major sporting event. China hosted the Olympics in2008; India has the Commonwealth Games in 2010; andthe Winter Olympics will be held in Russia in 2014. Forany fast-growing economy with expanding infrastructuredemands it seems that hosting a major sporting event isa must. The country is in a confident mood that thegames will catalyse infrastructure investment needed tosupport Brazil’s continuing development.

The World Cup is expected to bring significant benefitsto the country’s planning and infrastructure network.Such benefits will result from investments in airports,railways, roads, urban transport, stadia, hotels,telecommunications, and environmental projects,among others. All of these become opportunities forBritish expertise in planning, engineering, constructingand managing large scale infrastructure projects. It alsoopens a wide range of opportunities for UK companiesin equipping and modernising stadia, and deliveringmajor sporting events.

Estimates of the level of investment in infrastructurerequired to prepare for the event range from £10 billionto £30 billion. Many Brazilian experts and politiciansalike realise that the biggest challenge will be planningand constructing in a timely fashion the necessaryinfrastructure to host the games, in particularimproving transportation within and between the hostcities. The Brazilian Government already has a flagshipinvestment programme aimed at stimulatinginfrastructure development and boosting economicexpansion. The Accelerated Growth Plan, the Programade Aceleração do Crescimento (PAC), was announced in2007 and allocates around £208 billion over a fouryear period, from 2007 to 2010, and an additional£125 billion for investments post-2010. By the end of 2009 the Government is expected to define a ‘PAC da Copa’ which will outline government-fundedinfrastructure projects to support delivery of the World Cup in 2014.

In May 2009 FIFA announced the 12 cities that wouldbe hosting World Cup matches in 2014: Belo Horizonte,Brasília, Cuiabá, Curitiba, Fortaleza, Manaus, Natal, PortoAlegre, Recife, Rio de Janeiro, Salvador, and São Paulo.In each of the host cities work is underway to plan,construct and modernise the stadia and transportinfrastructure which will be necessary to host games.Over £1.5 billion is expected to be invested in stadiaconstruction and modernisation works. Around £1.4 billion will be invested in airports across thecountry over the next five years. The Government hascommitted to extending and improving the rail network,and the flagship Rio to São Paulo high-speed rail linkwill alone require £11 billion of capital investment.

The key challenge for Brazil is widely acknowledged tobe expanding and improving urban transport systems.Most large cities in the country suffer from heavycongestion, and as yet none of the major airportscurrently have a rail link to the city centre they serve.The Government hopes to address this problem bymeans of the PAC da Copa, which is likely to prioritiseurban transport projects. Funding has not yet beenagreed but proposals already exist which suggest over£10 billion could be invested in urban mobilityimprovements over the next few years.

2 IT’S ALL TO PLAY FOR

Executive Summary

On October 2 2009 the International OlympicCommittee selected Rio de Janeiro as the host city forthe 2016 Olympic and Paralympic Games. Many of thevenues which will be used were built or upgraded forthe 2007 Pan American Games. However, a number oflarge projects will construct and upgrade other venuesand the Olympic and Paralympic Village. UK companiesare particularly well placed to take advantage ofopportunities on these projects given the strong linksbetween London 2012 and Rio 2016. Expertise in allareas of planning, design, construction and fit-out ofvenues, as well as event delivery services will be ingreat demand as Rio follows in London’s footsteps ashost city of the Olympic and Paralympic Games.

The concept of green building/sustainable construction isrelatively new to Brazil although it is rapidly growing inimportance, particularly in the southern states. The WorldCup in 2014 and Rio 2016 will provide furthermomentum for the sustainable construction movement inBrazil through their respective sustainability requirements,and political commitments to ‘Sustainable Games’. Thiswill create potential opportunities for UK companies topartner with Brazilian companies in engineering,architecture and planning services. Opportunities alsoexist for consulting services in areas such as sustainabilityand energy efficiency, refurbishment and/or retrofit.

As this report outlines there is a huge amount of workto be done to equip Brazil to be the host nation of the2014 FIFA World Cup. This comes against a backdrop of the Brazilian Government committing a large amountof funding for infrastructure investments, to upgradeand expand the system to support Brazil’s continuinggrowth. There does not seem to be a lack of financingfor these types of projects, whether from the public orprivate sectors, or indeed a mix of both. However,priority projects will be those which provide both alegacy for local populations and the required levels ofcapacity and comfort during the World Cup. The scaleof these opportunities make Brazil an attractive prospectfor companies who are keen to broaden their horizons.

3INFRASTRUCTURE OPPORTUNITIES IN BRAZIL

This report is an assessment by UK Trade & Investment of the opportunities in the infrastructure and sportsinfrastructure sectors in Brazil. Specific sectors coveredare stadia and mass transportation (airports, ports, rail,urban mobility, and road). It provides an overview of theBrazilian market and in each sector identifies projectswhich are expected to be completed in the period leadingup to the FIFA World Cup in 2014. Where possibledetailed information has been included, however UKTrade & Investment does not accept responsibility for anyerrors or changes which may occur.

In putting this report together desk research wascarried out to obtain an overview of the market andthe sectors in question. This was followed by a seriesof interviews and meetings with contacts in Brazilincluding senior Government officials, from Federal,State and City levels, consultants, architecture andconstruction companies, trade associations, and multi-lateral agencies which provided a more detailed picture of the market and the specific opportunities.UK Trade & Investment sector managers based inBrazil, and sector teams in the UK have providedfurther information where appropriate.

Where possible all relevant information has beenincluded but further assistance can be provided by UK Trade & Investment. Please contact:

Rachel AzevedoUK Trade & InvestmentBritish Consulate General284 Praia do Flamengo22210-030 Rio de Janeiro, RJBrazilTel: +55 21 2555 9655/22Fax: +55 21 2555 9670Email: [email protected]

Economic overview

With a population of around 185 million, Brazil isthe fifth largest country in the world. Globally it isthe tenth largest economy, and it is South America’s largest and most influential market. During the1960’s through to the 1980’s the Brazilian economywas characterised by economic booms and busts withrampant inflation and high levels of governmentintervention. However, since the early 1990’s theBrazilian Government has implemented a number ofreforms that have resulted in the stabilisation ofinflation and more consistent and sustainableeconomic growth. Brazil is now widely consideredalongside Russia, India and China, as one of the fourmajor growing markets of the world (so-called BRICnations). With an abundance of agricultural andmineral resources, and a government that is activelyencouraging foreign investment, Brazil is one ofLatin America’s increasingly attractive places tooperate business activities.

Despite officially entering recession in 2009, withcontractions in GDP in Q4 2008 and Q1 2009, Brazil hasweathered the global downturn much better than manydeveloped economies around the world, and Q2 2009saw a return to growth of 1.9 per cent for the quarter.Strong domestic consumption has helped the economygrow. The Government forecasts that the economy willexpand more than 4 per cent next year. President Lulahas been quick to claim that the Brazilian economy isexperiencing an extraordinary recovery, and that it istime to spend more. In the first half of 2009,Government spending increased by 14.4 per cent.

Brazil has, at least in recent years, been a strongsupporter of free trade and since the start of theeconomic crisis President Lula, and Finance MinisterMantega have both emphasised the importance ofavoiding protectionism and concluding the Doharound. Therefore Brazil remains an attractive place todo business and May 2009 saw record inflows of bothFDI and foreign portfolio investment of US$2.5 billionand US$6.7 billion respectively. Investor confidence wasboosted further by announcements from Fitch,Standard and Poor’s, and more recently Moodys, thatBrazil would maintain ‘Investment Grade’ status.


Infrastructure in BrazilIntroduction

Infrastructure investment

The development of Brazil’s full potential for growth has,however, been handicapped by decades of under-investment in infrastructure. In an attempt to address thisissue the Government launched an Accelerated GrowthPlan, the Programa de Aceleração do Crescimento (PAC),in 2007. It aimed to stimulate infrastructure developmentand boost economic expansion.

The programme includes measures such as tax cuts tostimulate private investment, as well as a programme ofgovernment investment in infrastructure. The initialplan allocated £162 billion over a four year period, from2007 to 2010. However, a further boost of around £46billion was announced in January 2009 in response tothe global downturn, and an additional £125 billion forinvestments post-2010. Priority under the programme isgiven to renovation and modernisation of the existinginfrastructure, and to development of new projectswhich have the greatest potential to generate economicand social development.

Investments under the PAC programme are brokendown into three sectors: energy infrastructure, whichincludes energy generation, transmission, oil andgas, and biofuels; logistics infrastructure, whichincludes roads, rail, ports, waterways, and airports;and social and urban infrastructure, which includeselectric lighting, urban transport, water resources,and housing and sanitation. The total budget isdivided between the sectors as follows:

The PAC has recently been criticised for delays in theprogramme, which in many cases have been caused byplanning restrictions or delays in obtaining licences andapprovals. However, Dilma Rousseff, Brazil’s equivalentof Prime Minister, and President Lula himself havedefended the programme and have reaffirmedcommitments to investment.

Copa 2014

On 30 October 2007 Brazil was named as the hostnation of the 2014 FIFA World Cup. Reaction in Brazil was predictably ecstatic, President Lula summingup the feelings of a nation when he spoke of lookingforward to the ‘huge task’ of preparing for this uniquesporting event.

Estimates of the investment in infrastructure required to prepare for the event range from £10 billion to £30billion. The deadlines associated with delivering a majorsporting event in 2014 are already having an additionaldriver effect on infrastructure projects in Brazil. ManyBrazilian experts and politicians alike realise that thebiggest challenge will be planning and constructing in a timely fashion the necessary infrastructure to host thegames, in particular in terms of improvingtransportation within and between the host cities.

The key intervention from the Federal Government will be the implementation of a ‘PAC da Copa’ as it isbeing called by commentators. It is likely to focus onprojects which will improve urban mobility.


Original2007-2010

(£bn)

Incrementup to 2010

(£bn)

Total2007-2010

(£bn)

Post-2010(£bn)

Total(£bn)

Logisticsinfrastructure

18.8 12.2 31.0 9.1 40.1

Energyinfrastructure

88.6 6.5 95.1 116.1 211.2

Social and urbaninfrastructure

55.1 27.2 82.3 0.5 82.8

Total 162.5 45.9 208.4 125.7 334.1


Estimates of the investment in infrastructure required toprepare for the event range from £10 billion to £30 billion.


Preparing for 2014

Host cities

Following the decision by FIFA in 2007 to name Brazil as host country for the 2014 World Cup workintensified in the cities across Brazil which hadsubmitted bids to become host cities. Projects weredeveloped to modernise and expand existing stadia,and where necessary to construct new stadia. The citiesalso had to consider how they might tackle otherrequirements such as urban mobility, hotel capacity,sanitation and healthcare provision. Until the finaldecision was taken on which cities would host gamesthere was a certain amount of paralysis in the process,as candidate cities waited to find out if they would behosting matches in 2014.

In May 2009 FIFA announced the 12 cities that wouldbe hosting World Cup matches in 2014: Belo Horizonte,Brasília, Cuiabá, Curitiba, Fortaleza, Manaus, Natal, PortoAlegre, Recife, Rio de Janeiro, Salvador, and São Paulo.

The Local Organising Committee (LOC) for the WorldCup 2014 is being led by Ricardo Teixeira, the Presidentof the Brazilian Football Association, the ConfederaçãoBrasileira de Futebol (CBF). However, each city has itsown organising committee, responsible for ensuringthat all FIFA’s requirements are met. Contact details forthe LOCs and other useful websites for each city canbe found in the Annex at the end of this report.

The Infrastructure Gap

The Federal Government and the CBF used the timebetween FIFA’s decisions to undertake an assessment ofthe ‘infrastructure gap’ in each of the potential host cities.The assessment was carried out by the Brazilian tradeassociation for infrastructure and basic industries, theAssociação Brasileira da Infraestrutura e Industries de Base(ABDIB), on behalf of the Ministry of Sports and CBF.

In each city ABDIB analysed the existing infrastructure,and existing investment plans, and compared this witha ‘minimum level’ of requirements to enable the city tohost World Cup games, as well as an ‘ideal level’ ofrequirements. The study assessed infrastructure acrossnine different sectors: urban mobility, airports, ports,hotel capacity, energy, telecommunications, hospitalnetwork, sanitation, and security. As a result of itsanalysis ABDIB also recommended projects which couldcontribute to closing the infrastructure gap. ABDIB haspresented its findings to the Government who will useit to inform their decisions on which projects to fund.

PAC da Copa

The Federal Government has set up a process by whichit will define its PAC da Copa to support preparationsfor the World Cup in 2014. The PAC da Copa willoutline projects which will receive government funding,and will therefore be a useful guide to investment inthe run up to 2014.

Each of the 12 host cities has submitted requests forfunding for projects which will improve infrastructureahead of the World Cup. The Government willundertake an analysis of all the submissions, while alsoconsidering the findings of the ABDIB report and otheranalyses. The PAC da Copa will include existing PACprojects as well as those the Government considers vitalfor the successful delivery of the World Cup in 2014.The Government have made clear that they will notinclude projects in this World Cup package which areunlikely to be finished by 2014. Equally they are keento ensure that projects will positively contribute to thedevelopment of the host cities, and therefore need tobe appropriate to the demand of the local populationsto prevent the inadvertent creation of ‘white elephants’.The PAC da Copa is expected to be published inautumn 2009.


Other funding sources

In addition to the funding provided by the Governmentthrough the PAC da Copa, state and city governmentswill also set out their own plans for ensuring adequateinfrastructure to support the World Cup. In some casesthis may include financing projects to improve andmodernise stadia, in others it may be delivering specificprojects in transport, or sanitation, for instance.

The three-tier system of government makesorganisation and governance for World Cuppreparations rather complicated. In most of the citiesthe state and city governments are working together toensure the best use of combined resources. However, insome cases administrations at different levels are ofdiffering political persuasions which inevitably meansprojects take longer to be developed and approved.

The Government also want to incentivise theparticipation of the private sector in the constructionand refurbishment of stadia, as well as in thedevelopment of hotels and the hospitality sector in the12 host cities. To this end the Ministry of Tourism is indiscussions with the Inter-American Development Bank(IADB) about the possibility of opening up a £650million credit line to host cities. The Banco Nacional deDesenvolvimento Econômico e Social (BNDES), theBrazilian Development Bank, have also announced theywill provide £1.2 billion of credit lines for stadiumprojects, primarily those which will be managed bystate governments.

Partnering opportunities

The LOCs in most cases provide a central contactpoint for businesses wishing to be involved inprojects for the World Cup, although usually therelevant State Department will be responsible forindividual transport projects. Some cities havecontracted consultants to manage the co-ordinationand development of projects. In these instances theprivate consultants can be a helpful partner forbusinesses wishing to be involved in World Cupprojects. They are building ‘teams’ of consultantswith relevant expertise who can be deployed onprojects when appropriate. Deloitte Touche TohmatsuBrasil and PricewaterhouseCooper (PWC) are bothactive in this market.


Overview

According to FIFA’s inspection report, “none of thestadiums in Brazil would be suitable to stage 2014World Cup matches in their current state”. Three newstadia will be constructed in Natal, Recife, andSalvador, and most of the other nine stadia will require major structural works to attain the minimumrequirements set out by FIFA. Over £1.5 billion isexpected to be invested in stadia construction andmodernisation works. Financing for the projects willprimarily come from state governments and the privatesector through long-term concessions and PPPs.

The Government has stated that its priority for publicfunds will be to improve basic infrastructure particularlyurban transport, airports, security and hospitals,therefore any public funding for stadia projects will beprovided by state and city level governments. HoweverBNDES will provide credit lines to states who wish tosupport projects to develop stadia. Credit lines may alsobe provided directly to the private sector for specificstadia projects.

For further information on the sports infrastructuresector in Brazil, or any projects mentioned belowplease contact:


Host city projects

Belo Horizonte

Project: Renovation of the Mineirão stadiumValue: To be determined by ongoing projectFunding source: PPP; Minas Gerais State GovernmentTiming: Project being developed and tender

process for construction likely toopen April 2009

Opportunities: Investment opportunities,engineering and specialist services,construction services, stadium fit-outservices, equipment supply, securitysystems, event delivery services

The project to refurbish the Mineirão stadium has beendeveloped by German architects Von Gerkan, Marg &Partner (GMP) in partnership with local architectGustavo Pena. The refurbishment will improve access,security and views of the pitch. A major part of theproject is the construction of a new roof, which will bean independent light steel structure constructed aroundthe existing stadium. Other additions will be newrestaurant facilities and VIP areas, as well as improvedsecurity around the stadium. With a capacity of around70,000 the completed Mineirão will be a candidate tohost the opening ceremony, and/or semi-final games,which require a larger stadium. The Minas Gerais StateGovernment, who are the responsible authority for therenovation, have committed to the concept of creatinga ‘green stadium’ and are keen to ensure theenvironmental sustainability of the Mineirão.

Preliminary works on the stadium will begin in early 2010,although the process for contracting the constructionproject is not expected to begin until April 2010. Theproject is expected to take three years to complete.

Sector Opportunities

STADIA


Brasília

Project: Complete refurbishment and expansion of the Mané Garrincha stadium

Value: £210 millionFunding source: PPP; Distrito Federal

State GovernmentTiming: Tender for stadium construction

project expected to be publishedautumn 2009


The Governor of Brasília was expected to launch thetender for renovation of the Mané Garrincha stadiumat the end of July 2009, a project in the order of £210 million. However, it is now expected that this willdelayed until autumn 2009. The project will see thecapacity of the stadium increased from 35,000 to71,000. The surroundings of the stadium will betransformed into a multi-use centre for events such asconcerts, exhibitions and so on which will increase theviability of the project. The architect for the project isCastro Mello, a family company from São Paulospecialising in sports architecture. With the enlargedstadium Brasília will bid to host the opening ceremonyof the World Cup. Work on the stadium is expected tobe complete by the end of 2012.

The Distrito Federal State Government has alreadysecured part of the financing for the project throughthe sale of plots of land near the stadium. However,the project will be a PPP and the State is seekingpotential investors.

Cuiabá

Project: Complete refurbishment of Verdão stadium

Value: £106 million (stadium) & £140 million(regeneration of surrounding area)

Funding source: Mato Grosso State Government inpartnership with private sector

Timing: Construction tender publishedAugust 2009, contract to be awarded by end 2009


The Verdão stadium, built in 1974, will be completelyrefurbished at an estimated cost of £106 million. Thecapacity on completion will be 42,500. However, theproposal includes plans to make part of the stadiumusing pre-moulded sections which can be removed afterthe World Cup to reduce the capacity to 28,000 whichis more appropriate to the demand normally seen at thestadium. The variety of rooms required by FIFA duringthe World Cup, which will be located under the stands,will be transformed into a convention centre afterwards.The architect for the project is GCP, based in São Paulo.They have developed the project and will be co-ordinating construction work. The tender process forconstruction work closes in November 2009, and thecontract will be awarded by the end of 2009. Work onthe stadium should be finished by the end of 2012.

The city is also planning to redevelop the areasurrounding the stadium into a leisure complex toinclude hotels, restaurants, parking areas, lakes, greenspaces and footpaths. The project is expected to costaround £140 million, which will be financed by theMato Grosso State Government together with someprivate sector investment. The complex will bemanaged by means of a concession. The city is alsoplanning to construct two training centres, and othertraining fields, to satisfy FIFA’s requirements.


Curitiba

Project: Expansion and renovation of theArena da Baixada stadium

Value: c. £40 millionFunding source: Private sectorTiming: Not knownOpportunities: Engineering and specialist services,

construction services, stadium fit-outservices, equipment supply, eventdelivery services

The refurbishment project will include an increase inthe number of seats in the lower stand, achieving atotal capacity of 41,000. In addition VIP areas andchanging areas will be renovated and expanded.

The stadium is owned by the football club AtléticoParanaense who will manage the expansion andrenovations. It is expected that some of the fundsrequired for the works will come from sponsorship and advertising. However, the state and citygovernments have pledged support for the project.

Fortaleza

Project: Refurbishment of the Castelão stadiumValue: £125 million (including development

of commercial spaces)Funding source: PPP; Private investors being sought

by Ceará State GovernmentTiming: Project under developmentOpportunities: Investment opportunities, engineering

and specialist services, constructionservices, stadium fit-out services,equipment supply, security systems,event delivery services, propertydevelopment

According to local organisers the Castelão stadium isalready one of the stadiums closest to achieving FIFA’srequirements. However it will still undergo a refurbishmentwhich will include an extension of the roof structure,expansion of space for the media, and an increase in thenumber of parking spaces. In addition the projectproposes the construction of a hotel, shopping centre andconvention centre in the stadium complex. The CearáState Government is seeking private sector partners to co-invest in the development, which is estimated to costaround £125 million.


Manaus

Project: Complete refurbishment of Vivaldão stadium

Value: £160 millionFunding source: Amazonas State Government;

private sector investmentTiming: State Government aiming for work

to start in February 2010Opportunities: Investment opportunities, engineering

and specialist services, constructionservices, stadium fit-out services,equipment supply, security systems,event delivery services, propertydevelopment, stadium operators

The Amazonas State Government has proposed acomplete refurbishment of the Vivaldão stadium inManaus to achieve a capacity of 48,000. The proposalalso includes the redevelopment of the surroundingarea into a leisure and sport complex. The estimatedcost of the project is around £160 million, which isalso planned to include commercial and residentialareas. The existing gymnasium complex next to thestadium will be used as a media centre.

German architects Von Gerkan, Marg & Partner (GMP)have developed the renovated stadium design, whichcombines functional requirements with environmentalsustainability. For example the stadium will have naturalsystems of ventilation and air conditioning, use rainwater and minimise water use, and will use efficientmethods of lighting when daylight is not sufficient.

The State Government are seeking potential investorsand/or operators for the new stadium.


Natal

Project: Construction of a new Arena dasDunas stadium and surroundingcommercial and residentialcomplexes

Value: c. £130 millionFunding source: PPP; state and city governmentsTiming: Construction tender process expected

to open in autumn 2009Opportunities: Engineering and specialist services,

construction services, stadium fit-outservices, equipment supply, securitysystems, event delivery services

The design and masterplan for the Arena das Dunas site has been developed by Brazilian architects, CDCArquitetos Associados, working in partnership withPopulous (formerly HOK-Sport). The masterplan involvesthe redevelopment of an area of the city which housesmany government buildings but which is currentlyunder-utilised. The regenerated site will include theArena das Dunas, newly reformed government offices,hotels, shopping centres, commercial premises,residential areas, a convention centre, green leisure areasand an artificial lake. It is hoped that the stadiumproject will be completed by the beginning of 2013ahead of the FIFA Confederations Cup. Current planssee the stadium having a capacity of 45,000, but thereare questions about the long-term economic viability ofa stadium of this size. Temporary structures are apotential a solution.

A consultancy team has already been put together todevelop the project for the construction tender, whichwill be published in autumn 2009. A new companywill be formed by a consortium of investors, whichwill also include representatives from the state andcity governments.

Porto Alegre

Project: Complete refurbishment of the Beira Rio stadium

Value: £38 millionFunding source: Private investment; State Government

and other private sector funds forassociated projects

Timing: Initial phase delivery by end November2009. Further design and planningbefore construction tender is published

Opportunities: Investment opportunities, engineeringand specialist services, constructionservices, stadium fit-out services,equipment supply, security systems,event delivery services

The Beira Rio stadium refurbishment project has beendeveloped by Brazilian architects Hype Studio. It willinclude the addition of a new roof, refurbishment andexpansion of the lower tier of the stadium, renovationof the interior (to include new suites, restaurants,offices etc). In addition to the stadium works theproject proposes construction of two new hotels, amedical centre, a convention centre, a marina and acultural centre in the surrounding area.

The initial design phase of the stadium project isexpected to be delivered by the end of November. Thestadium work will be completed in 2013. Porto Alegre’sWorld Cup Executive Committee is also expecting tohave confirmed private investors in the project by theend of November 2009.


Recife

Project: Construction of ‘Cidade da Copa’including a new stadium, residentialarea, and commercial areas

Value: £160 million (stadium) and £320 million (residential areas)

Funding source: PPP; Pernambuco State GovernmentTiming: Feasibility studies underway; tender

process to begin in autumn 2009Opportunities: Investment opportunities, engineering

and specialist services, constructionservices, stadium fit-out services,equipment supply, security systems, event delivery services, property development

The project Cidade da Copa or ‘World Cup City’ willincorporate not only the construction of a new 46,000capacity stadium, but also construction of a residentialsector, a shopping centre, hotels and other commercialareas. The State Government of Pernambuco already ownsthe site in Recife, but is hoping to attract private sectorinvestors to participate in a PPP to develop the complex.It is expected that the private sector partner(s) will operatethe stadium for 30 years. The arena itself is planned to be completed by the end of 2012 ahead of the FIFAConfederations Cup in 2013, and is likely to cost around£160 million.

The residential area will be constructed in a second phase,to be completed by 2018. Further investments of around£320 million will be made to develop this part of thecomplex. It is proposed that the new area will be accessedby a light railway linking to the metro system.

Rio de Janeiro

Project: Renovation of the Maracanã stadiumand regeneration of surrounding area

Value: c. £150 millionTiming: Preliminary study complete and

tender process to be carried out inautumn 2009; regeneration projecttiming to be confirmed

Funding source: PPP; State Government; Rio deJaneiro city and private sectorpartnership for regeneration project

Opportunities: Urban regeneration, planning &design, investment opportunities,engineering and specialist services,construction services, stadium fit-outservices, equipment supply, securitysystems, event delivery services,property development

Modernisation works to the stadium will includeconstruction of a new roof, improvement of fansvisibility, new commercial boxes, infrastructure works toimprove access to the stadium and crowd movementstrategies, and enlargement of the parking area. Thestadium will have a capacity of 86,000 on completion.However, in addition to the planned improvement worksthe stadium will also become a privately managedcomplex, by means of a 35 year concession. Works areexpected to begin in January 2010, although this is ofcourse dependent on timing of the tender process.

In addition to the main project to refurbish the stadium the Rio de Janeiro City Government also has plans to regenerate the surroundings into a large leisure area. The total area to be redeveloped is 1.4 million sq metres. The city has undertakenpreliminary studies but further planning and assessmentactivities will be required to develop the project. One ofthe main elements of the project will be the constructionof a wide access way, around 500 metres wide, tointegrate the Maracanã (stadium) area with the adjoining‘Quinta da Boa Vista’ area. These two sites are very closebut are currently divided by a main railway line.


The city aims to raise funds to invest in infrastructureby selling sites for property development, bothcommercial and residential, along the length of theaccess way and in the surrounding area. Rio CityGovernment potentially has up to £100 million tocommit to the project, but is keen to attract furtherinvestment from the private sector.

A third part of the city’s World Cup project is theconstruction of a Football museum and media centre,which would be located in Barra da Tijuca. Plans forthis part of the project are being developed with theConfederation of Brazilian Football (CBF). Rio CityGovernment are hoping the media centre will be aprivate sector development, which could be used as aconvention or exhibition centre in the long-term, butwhich would house a media centre for the World Cup.

Documents relating to the Maracanã project areavailable at the website below:www.turismoesporte.rj.gov.br/ppp.asp

Salvador

Project: Renovation of the Fonte Nova stadium

Value: £170 millionFunding source: PPP; Bahia State GovernmentTiming: Expressions of interest for PPP

sought in autumn 2009Opportunities: Investment opportunities,

engineering and specialist services,construction services, stadium fit-outservices, equipment supply, securitysystems, event delivery services

In April 2008 the Bahia State Government published anotice for companies to submit preliminary proposalsfor the new Fonte Nova stadium. They received sixtechnical proposals and the State Government approvedthe conceptual project developed by Setepla TecnometalEngenharia Ltda, in association with German companySchultz Arquitetura, who also worked on the Hannoverstadium for the 2006 FIFA World Cup. The proposalputs the renovation and additional work at a cost ofaround £170 million.

The new stadium will have a capacity of 55,000, withthe possibility of increasing to 60,000 with temporarystructures. It will have a modern roof structure whichwill allow good views from around the stadium, and thecomplex will include conference facilities, restaurantsand cafes, a football museum, a parking annex withspace for 5,000 vehicles, and will capture rain water foruse on site. Bahia State Government is hoping to attractprivate investors to enter into a PPP for the stadium.

Documents relating to the project are available at thewebsite below:www.setre.ba.gov.br/consultapublica/


São Paulo

Project: Renovation of the Morumbi StadiumValue: £78 millionFunding source: São Paulo Football Club and

partnerships with private sectorTiming: Construction tender to be published

in autumn 2009Opportunities: Engineering and specialist services,

construction services, stadium fit-outservices, equipment supply, securitysystems, event delivery services

Renovation works to the Morumbi stadium will includeconstruction of commercial boxes and shops, a mediacentre, FIFA guests’ boxes and a new roof. The finalcapacity will be 62,000. The project will be carried outin three different phases and it is expected to becomplete by 2012. The city of São Paulo is bidding tohost the opening ceremony for the World Cup.

It was reported in August 2009 that German architectsGMP have signed a contract to advise São Paulo on the stadium project, and will also design the new roofstructure. Although initially São Paulo soccer clubannounced they did not need public money for therefurbishment it is likely that the project will befinanced, at least in part, by a BNDES loan.


Overview

Of the country’s 2,000 officially registered airports,the 66 most important handle over 95 per cent of allpassenger traffic. These airports are currently operated by a government agency, Empresa Brasileira de Infra-Estrutura Aeroportuária, more commonly known as Infraero (www.infraero.gov.br). The organisation haseffectively run Brazil’s airports, from the highlyprofitable such as São Paulo to remote, unprofitableairports in the remotest reaches of the Amazon basinwhich act as vital lifelines to the communities livingthere, for the past 30 years. Infraero has investedheavily in recent years in airport expansion andmodernisation, with several spacious and attractivenew terminals to its credit, as part of a £1 billioninvestment plan from 2004 to 2007.

Official figures released by Infraero show that despite adecrease of about 2.5 per cent in aircraft movements atthe top 20 Brazilian airports in 2008, 113 millionpassengers transited the main terminals of the country.The busiest airport is São Paulo International (Guarulhos),which last year processed 20 million passengers, a 5 per cent increase from 2007. In 2008 the second busiestairport was Congonhas in central São Paulo, which saw its passenger numbers decrease by 8 per cent to around14 million. The total number of passengers at RioInternational (Galeão) in 2008 was 11 million. Theseairports operate approximately 1.8 million landings andtake-offs and carry 1.3 million tons of cargo a year.

Infraero does not have the resources required tomodernise and equip airports with facilities, technology,and manpower at the scale needed and there is a clearperception that the current institutional arrangementand funding mechanisms are not sufficient to respond to the country’s needs if the trajectory of growth issustained – even at a lower pace. The Government istherefore studying alternative models to attract privateinvestment into the business of constructing and/ormodernising and managing airports. Privatisation,concessions, and public-private-partnerships are some of the alternatives in question.

Preparations for the World Cup in 2014 will focus onincreasing capacity at the relevant airports. Infraero, who have been allocated funds from the PAC, have aprogramme of investment to improve and expand manypassenger terminals.

Infraero expect there to be opportunities forinternational consultants to work on masterplanningand design as there are a limited number of Braziliancompanies who have capability in this area. SomeBrazilian states are already beginning to employconsultants themselves, for example Minas Gerais StateGovernment have contracted a Singaporeanconsultancy to design a cargo airport, associated cargoinfrastructure and industrial complex where importsand exports can be processed.

Infraero recognise that there is a fairly small ‘pot’ ofcontractors who are able to carry out the type of worksnecessary for a large scale airport project, such as theconstruction of a new terminal (Odebrecht, CamargoCorrêia, Andrade Gutierrez, Quieroz Galvão, OHL).There is a desire to expand this and create a morecompetitive market in Brazil, recognising the potentialfor international expertise to enter this market.

All tenders for work at Infraero’s airports are publishedon their website (Portuguese only):http://licitacao.infraero.gov.br/portal_licitacao/details/licitacao/pesquisa_licitacao.jsp

For further information on the airport sector in Brazil,or any projects mentioned below please contact:

Marcelo TavaresBritish EmbassySetor de Embaixadas SulQuadra 801 conjunto KBrasília DFTel: +55 61 3329 2376Fax: +55 61 3329 2369Email: [email protected]


AIRPORTS


Host city projects

Around £1.4 billion will be invested in airports acrossthe country over the next five years, much of it via thePAC programme. The investments are planned not onlyto deliver an appropriate level of service for passengersduring the World Cup in 2014 but are also based onprojections for future demand. The main projects to be initiated are outlined below.

Belo Horizonte

Project: Expansion of passenger terminal at Confins International Airport –Tancredo Neves

Value: £70 millionFunding source: Infraero (PAC)Timing: Preliminary studies to be concluded

early 2010Opportunities: Airport design and masterplanning,

airport terminal interior design,baggage handling systems, specialistairport equipment, construction andengineering services, project and costmanagement services

Infraero, under the PAC programme, is undertakingpreliminary studies into a project to renovate andexpand the passenger terminal at the internationalairport in Belo Horizonte. These studies are expected to be concluded in May 2010. Timing of subsequentphases is not yet known.

The airport currently transports around five millionpassengers per year, and around 60,000 tonnes of cargo.


Brasília

Project: Expansion of passenger terminal and improvement of access to Brasília International Airport – Presidente Juscelino Kubitschek

Value: £140 millionFunding source: Infraero (PAC)Timing: Project is currently in the design phase,

tenders for construction project likelyto be early 2010

Opportunities: Airport terminal interior design,baggage handling systems, specialistairport equipment, transport planning,construction and engineering services,project and cost management services,security equipment

In March 2009 Infraero approved the initiation offeasibility studies for the renovation and expansion of the International Airport in Brasília. ATP Engenharia is undertaking these studies, and will conclude thedevelopment of the projects (both renovation andexpansion of the passenger terminal) by January 2010.

The whole project is expected to require around £140million investment, and will include the renovation of8,000sq metres of the existing 80,000sq metres, as well as increasing the area of the terminal by a further80,000sq metres. The proposed expansion should allow an increase of eight million passengers per year, to a total of 25 million passengers per year.

The renovation of the airport will increase the space andflow of passengers within the terminal. Specificimprovements will be expansion and improvement of thearrivals area and baggage reclaim, increasing the numberof check-in desks, improving security (new X-raymachines), acoustics, and accessibility. Timing of specificcontracts are estimated as below:

Project: Construction of a new cargo airport,and associated infrastructure

Value: £330 millionFunding source: Private sector to construct and

operate, public sector to financefeasibility studies.

Timing: Newmark Knight Frank (NKF)contracted to undertake feasibilitystudies in October 2008, seekingprivate sector investors

Opportunities: Capital investment, propertydevelopment, construction andengineering services, specialist airportequipment, logistics systems, projectand cost management services

A proposal for a second airport in Brasília is beingassessed, one which would primarily deal with cargo.The city signed an agreement of technical co-operationwith Newmark Knight Frank (NKF) in October 2008.The agreement covers the scope of the area to beincluded, contracts for feasibility and environmentalstudies and an agreement that NKF will seek partnersinterested in investing in the construction of an‘industrial airport’ in Brasília.

The initiative would transform Brasília into adistribution hub for both the internal and externalmarkets. In addition to the construction of the airport,the preliminary studies propose the construction of an industrial park, a distribution centre, and a customswarehouse. The total project will require investment ofaround £330 million.

According to the terms of the agreement with NKF allthe developments will be constructed by private sectorfunding. The public sector will be responsible fordelivering all the required studies for the projects.

Date WorksJanuary 2010 Construction of new apron April 2010 Renovation of existing terminal buildingJuly 2010 Expansion of passenger terminalJuly 2010 Electro-mechanical systemsJuly 2010 Electronic systemsMarch 2011 Installation of interiors including furnitureSource: Brazilian Federal Government


Cuiabá

Project: Refurbishment of the passengerterminal and expansion of parkingareas at Várzea GrandeCuiabá International Airport –Marechal Rondon

Value: c. £10 millionFunding source: Infraero (PAC)Timing: Tender for design phase to be

published in October 2009Opportunities: Airport design and masterplanning,


The international airport in Cuiabá, Marechal Rondon,will receive investment of around £10 million to preparefor the World Cup in 2014. The project will refurbishthe passenger terminal and expand and renovate theairport’s parking area. The capacity of the airport willincrease from 1.5 million passengers per year to around3.3 million per year on completion. Among theproposed projects are the installation of three boardingbridges, and the construction of an internal connector,doubling the number of check-in desks from 14 to 28,and refurbishment of the boarding and arrival areas.The total area of the passenger terminal will beincreased from 5,400sq metres to 18,970sq metres.

Discrepancies in the original tender process in 2007 have resulted in the project being re-tendered.The new contract for the pre-construction phase willbe published around October 2009, and the contractfor the construction works will be competed in May 2011.

Curitiba

Project: Expansion of pavement areas,infrastructure, drainage and othercomplementary works at São Josédos Pinhais/Curitiba InternationalAirport – Afonso Pena; expansion of cargo terminal

Value: £13 millionFunding source: Infraero (PAC)Timing: Construction tender under

development. Tenders for cargoterminal works expected in August2009, and other works early in 2010

Opportunities: Specialist airport services

Infraero are undertaking a project to expand pavementareas by 20,000sq metres and to construct associatedinfrastructure. The design phase of the work wascontracted in July 2009 and the construction tender isexpected to be published in March 2010.

A separate project will see the cargo terminal expandedby 5,000sq metres.


Fortaleza

Project: Refurbishment and expansion ofpassenger terminal at FortalezaInternational Airport – Pinto Martins

Value: £80 millionFunding source: Infraero (PAC)Timing: Preliminary studies to conclude in

July 2010. Design and constructiontenders to be published consequently

Opportunities: Airport design and masterplanning,airport terminal interior design,baggage handling systems, specialistairport equipment, construction andengineering services, project and costmanagement services

Preliminary studies are commencing on a project to expand the passenger terminal at FortalezaInternational Airport. Conclusions of the studies arenot expected until July 2010 after which tenders forthe design and construction phases will be published.

The project will increase the capacity of the airport from 3.5 to 8 million passengers per year, increasing the area of the airport from 38 million sq metres to 69 million sq metres.

Manaus

Project: Refurbishment and expansion ofpassenger terminal and constructionof a second runway at ManausInternational Airport – BrigadeiroEduardo Gomes

Value: £260 million; c. £200 million newrunway, £60 million terminal works

Funding source: Infraero (PAC)Timing: Initial studies underway, design phase

likely to be tendered early 2010Opportunities: Airport design and masterplanning,


The proposals for Manaus International Airport willincrease its capacity from 1.5 million passengers peryear, to four million passengers per year. The airportcurrently handles around two million passengers per year, which is technically over its capacity, and 130 million tonnes of cargo.

Infraero are undertaking preliminary studies into therefurbishment and expansion of the passenger terminal.This initial phase is expected to be completed by theend of 2009. Construction works are not expected tobegin until early 2011, although it is hoped that theproject will be concluded by the end of 2013 ahead of the World Cup in 2014.


Natal

Project: Construction of Aeroporto de SãoGonçalo do Amarante International,a new private-public airport

Value: £225 million, potential for furtherscaling up of c. £675 million

Funding source: PPPTiming: Competition for the concession

expected to open in November 2009Opportunities: Capital investment, airport operation,

multidisciplinary consultancyservices, airport design andmasterplanning, airport terminalinterior design, baggage handlingsystems, specialist airport equipment,construction and engineeringservices, project and costmanagement services

The construction of this airport will provide the State of Rio Grande do Norte with a civil internationalairport. The existing international airport serving the State, Augusto Servero, which currently operatesmilitary and civilian flights will remain solely for theuse of military aviation and training.

Due to the scale of the investment required theconstruction has been planned in phases. The initialphase of construction of the runway and apron areas has already started and is expected to be completed bythe end of 2009. The project, which is included in thePAC programme, includes groundworks, pavementation,drainage, signalling, and auxiliary systems for the entireairport area, around 3,000sq metres. This stage of theproject is valued at around £40 million. A workforceincluding staff from the Brazilian army, together withengineers from ENGEVIS Engenharia S/A, is working onthe project.

In parallel technical, economic, and environmentalfeasibility studies for the airport have recently beencompleted by BNDES. The studies recommended theairport should be financed by a concession model. Thecompetition for the concession is expected to begin inNovember 2009. The winning consortium will beresponsible for the remaining construction work andoperation of the airport.

It is expected that the construction of the airport willoccur in two phases. The first will provide the airportinfrastructure and main passenger and cargo terminalsincluding runways, taxiways, aircraft stands, terminals,air traffic control systems, access roads and parkingareas. The passenger terminal, of 56,000sq metres, will process 5.2 million passengers per year. The cargoterminal will be 6,900sq metres. An investment ofaround £225 million will be required for this first phase,which it is estimated will be able to handle the demandforecasted up to 2020. It is planned to be completed by the end of 2012 and operating in 2013, ready forthe 2014 World Cup.

The second phase of construction will see the scalingup of the airport as demand increases, up to apotential capacity of 40 million passengers per yearand 1.5 million tonnes of cargo, within the confines of the existing airport area. It is expected that anexpansion of this size would require investment ofaround £675 million.

Porto Alegre

Project: Expansion of runway at Porto AlegreInternational Airport – Salgado Filho

Value: £40 millionFunding source: Infraero (PAC)Timing: Construction tender to be published

by the end of 2009, subject toenvironmental and other approvals

Opportunities: Specialist airport services,construction services

Appropriation problems have beset this project, with theState Government claiming that it does not have thefunds necessary to acquire all the land needed for theproject, around £30 million. Other licences are also inthe process of being sought. The project for constructionof the runway will be tendered when licences, approvalsand appropriations are secured.

A new cargo terminal is also being constructed atPorto Alegre airport. The contract is expected to besigned in 2009 although is dependent on approvalsfrom the Treasury.


Rio de Janeiro

Project: Refurbishment of passengerterminals 1 and 2, expansion ofTerminal 2, construction of a newgarage building, new terminal forgeneral aviation and expansion of pavement area at Rio deJaneiro/Galeão International Airport– Antônio Carlos Jobim

Value: £222 millionFunding source: Infraero (PAC)Timing: Renovation of Terminal 1 design

phase to be tendered early 2010; Fit-out of Terminal 2 on-going

Opportunities: Multidisciplinary consultancy, airportdesign and masterplanning, airportterminal interior design, baggagehandling systems, specialist airportequipment, construction andengineering services, project and costmanagement services, ICT systems,visual signage

Renovation and modernisation of Terminal 1

Initial studies are being carried out and are expected to be complete by the end of 2009. The design phasetender will be published early in 2010, and constructionphase tender is likely to be launched some time in thefirst half of 2011. It is expected that the project valuewill be around £100 million. Small priority works are, inthe meantime, being undertaken by Infraero includingrenovation of toilets, modernising the informationsystem, renewing the signage and so on. It is hopedthat the main project will be concluded by 2012 aheadof the FIFA Confederations Cup in 2013.

Fit-out of Terminal 2

Civil engineering works on Terminal 2 are currently inprogress, and around 50 per cent of the total area ofthe terminal is already open and in operation. Theproject will see the operational capacity of the terminalexpanded from 8 million to 10 million passengers peryear. Contracts for the following elements of the projectare expected to go to tender over the next 12 months:

After the conclusion of the works each terminal will becapable of handling ten million passengers per year.

Date Works Value (£m)October 2009 Electrical systems & air conditioning 24October 2009 Electronic & ICT systems 11October 2009 Baggage handling system 32October 2009 Refurbishment of further areas of Terminal 2 30June 2009 Visual signage Not knownSource: Brazilian Federal Government


Salvador

Project: Construction of a second runway at the international airport

Value: Not knownFunding source: Infraero (PAC)Timing: Environmental impact assessment to

be carried out by April 2010, tenderfor design phase to be published inOctober 2010

Opportunities: Multidisciplinary consultancy,construction and engineeringservices, project and costmanagement services, specialistairport services

The airport currently handles over six million passengersper year and 43 million tonnes of cargo. A secondrunway is being proposed although there have beenquestions about the environmental impact this wouldhave on the area. An environmental impact assessmentwill be carried out later this year, and conclusions areexpected by spring 2010. Infraero are hoping that,assuming environmental licences are obtained, the designphase of the project will be tendered in October 2010.


São Paulo

Project: Construction of a third passengerterminal and renovation/reconstruction of runways andpavement areas at São PauloInternational Airport – Guarulhos

Value: £440 millionFunding source: Infraero (PAC)Timing: Tender for the masterplan published

in June 2009, works expected to startin 2012

Opportunities: Multidisciplinary consultancy,construction and engineering services,project and cost management services,specialist airport services, baggagehandling systems, specialist airportequipment, IT systems

Guarulhos airport will undergo major works between now and 2014 in order to increase its capacity by morethan 12 million passengers per year, from 17 million to 29 million per year. The design and masterplanning tenderfor this project was published in June 2009. Tenders forthe construction works will start being published from theend of 2011. Timings for these are planned as follows:

Project: Works at São Paulo Airport – Congonhas

Value: Total works £100 millionFunding source: Infraero (PAC)Timing: Major works completed, design phase

for new aircraft parking area to startautumn 2009

Opportunities: Masterplanning and design services,multidisciplinary consulting,construction and engineering services

A new control tower is currently under constructionand is expected to be completed by mid-2010. Aterminal project has already been completed, as hasrenovation of the main runway. Remaining works to beundertaken are the construction of an area for VIPaircraft. There were problems getting approval for thisproject and therefore the pre-construction design phasetender will only be published in autumn 2009.

Date WorksNovember 2011 Civil works, construction of terminal building and access roadJuly 2011 Construction of new hangarJune 2011 Ground works and construction of aeroplane pavementJuly 2011 Electronic systems and telecommunications networkNovember 2011 Mechanical systems – baggage handling systemsJuly 2011 Mechanical systems – lifts, escalators and moving walk-waysJune 2011 Mechanical systems – boarding bridgesDecember 2012 Interior fit-out and furniture installationJune 2011 Expansion and renovation of principal electric substationSource: Brazilian Federal Government


São Paulo continued

Project: Construction of a new passengerterminal and second runway atCampinas Airport – Viracopos

Value: c. £1 billion in totalFunding source: Infraero (PAC)Timing: Second runway project being

developed, likely to be tendered inautumn 2009; new terminalmasterplan tender to openSeptember/October 2009, constructiontender to be launched in the first half of 2011.

Opportunities: Masterplanning & design services,multidisciplinary consulting, airportterminal interior design, specialistairport equipment supply, baggagehandling systems, construction andengineering services, project and costmanagement services, ICT systems

Campinas airport is located 99km from São Paulo citycentre, and 18km from Campinas. It currently hasmoderate passenger traffic, handling just over one millionpassengers per year, but it is the second largest cargoairport in Brazil and serves as a hub across South America.

Infraero has proposed almost £1 billion of capitalinvestment in the airport, mainly for the constructionof a new runway and a new passenger terminal. Thetender for the pre-construction phase of the runwaywill be published in autumn 2009. The tender formasterplanning and design of the new passengerterminal will be published in September/October 2009and the contract is expected to be awarded by the endof 2009. The construction phase tenders are expectedto be published from the beginning of 2011 with workstarting in the second half of 2011. It is hoped that thewhole project will be completed by early 2015.

Additional projects

Florianopolis

Project: Construction of a new passengerterminal and associated infrastructure

Value: c. £100 millionFunding source: Infraero (PAC)Timing: Contract for pre-construction phase of

associated infrastructure signed in July2009, tender for construction expectedto be published in early 2010; tenderfor design phase for terminal buildingto be published November 2009.

Opportunities: Multidisciplinary consultancy, airportdesign and masterplanning, airportterminal interior design, baggagehandling systems, specialist airportequipment, construction andengineering services, project and costmanagement services

The airport currently handles around two millionpassengers per year and 12.5 million tonnes of cargo.

Foz do Iguaçu

Project: Expansion and refurbishment ofpassenger terminal

Value: Not knownFunding source: Infraero (PAC)Timing: Design phase to be tendered

October 2009Opportunities: Multidisciplinary consultancy, airport

design and masterplanning, airportterminal interior design, specialistairport equipment, construction andengineering services, project and costmanagement services

A relatively small international airport, which catersmainly for tourists visiting the Iguaçu Falls, the airportcurrently handles around 750,000 passengers per year,and 0.7 million tonnes cargo. Infraero is currentlyundertaking preliminary studies which will inform thedesign phase tender.


Goiania

Project: New passenger terminal at Santa Genoveva Airport

Value: £100 millionFunding source: Infraero (PAC)Timing: Design phase being re-tendered in

autumn 2009, construction phase to be tendered by July 2010

Opportunities: Multidisciplinary consultancy, airportdesign and masterplanning, airportterminal interior design, baggagehandling systems, specialist airportequipment, construction andengineering services, project and cost management services

Legal issues between Infraero and the consortium whooriginally won this contract, in 2007, have resulted inInfraero having to re-tender the construction project.The design phase tender for the new terminal isexpected to be re-published in autumn 2009, and theconstruction phase will be tendered in July 2010.

The project includes construction of a new passengerterminal, new aircraft parking areas, taxiways, vehicleparking areas and associated infrastructure.

Ilheus

Project: Construction of a new airportValue: Design £1 million, Construction

c. £50 millionFunding source: Infraero (PAC)Timing: Tender for design phase to be

published January 2010Opportunities: Multidisciplinary consultancy, airport

design and masterplanning, airportterminal interior design, baggagehandling systems, specialist airportequipment, construction andengineering services, project and costmanagement services

A new airport with a runway of 3,000 metres is beingplanned in Ilheus. Infraero are currently working withthe State Government of Bahia on initial studies andapplications for relevant licences and approvals. It isplanned that the design phase of the project will go totender early in 2010, although there have been delays inthe original schedule and a programme of appropriationwill also be required to prepare the site. The constructionis estimated to cost around £50 million.

Santarém

Project: Construction of a new passengerterminal and associated works

Value: Not knownFunding source: Infraero (PAC)Timing: Initial studies are expected to

conclude by November 2009, after which the design and planningtender will be published

Opportunities: Multidisciplinary consultancy, airportdesign and masterplanning, airportterminal interior design, baggagehandling systems, specialist airportequipment, construction andengineering services, project and costmanagement services

The airport, in the State of Pará, currently handlesaround 400,000 passengers per year, and 4.8 milliontonnes of cargo.


Vitória

Project: Construction of new passengerterminal, control tower, taxiwaysystem and new cargo terminal

Value: c. £140 million totalFunding source: Infraero (PAC)Timing: Tender for design phase of terminal

to be published autumn 2009;construction tender to be publishedin summer 2010

Opportunities: Multidisciplinary consultancy, airportdesign and masterplanning, airportterminal interior design, baggagehandling systems, specialist airportequipment, construction andengineering services, project and cost management services

The renovation of the airport was intended to expandthe capacity of the airport from around 0.5 millionpassengers per year to 2.1 million per year. Due toirregularities in the original tendering process thecontract which was agreed in 2007 has been scrappedand work halted in July 2008. The development of thedesign for the passenger terminal and complementaryworks will therefore be re-tendered shortly. The tenderfor the construction phase is expected to be publishedin June 2010. A separate project is being developed bythe Brazilian military for the completion of thesupporting infrastructure works which had alreadybegun to be constructed on the site.

Vitória is one of 35 international cargo airports in Brazil. The design and construction of a new22,700sq metres cargo terminal is being managed as a separate project. Preliminary studies are underway and are expected to be concluded in autumn 2009. A tender for the design phase will be published shortlyafterwards, and it is expected that the tender for theconstruction phase will be published around June 2010.

Cargo airports investments

Infraero have committed to investing in cargo logistics,despite the global financial crisis. Infraero hasresponsibility for 33 cargo terminals in Brazil and in2009 will invest around £20 million on projects andequipment for these terminals. In 2008 investments inmodernisation in the sector included the installation ofautomated control and storage systems, in theprinicipal air freight terminals in Brazil – Guarulhos(São Paulo), Viracopos (São Paulo), Manaus(Amazonas), and Galeão (Rio de Janeiro).


Overview

The Brazilian port system is composed of 40 publicports, most of them located along the 8,500km ofBrazilian coastline. They are managed and operated bythe publicly-owned company Companhia Docas, or byprivate concessions. Over the last ten years exportsfrom Brazil have more than tripled and imports havemore than doubled. The port sector in Brazil nowtransports around 700 million tonnes of cargo per year.Ninety-five per cent of Brazilian trade by volume ishandled by the country’s ports, and the amount ofcargo demand is forecasted to increase by almost fiveper cent per annum.

In 2007 the Federal Government created a ‘SpecialPorts Department’ (SEP/PR) to be responsible fordeveloping policies to expand and upgrade theBrazilian port system. One of the Department’s keyareas of work is developing and monitoring portprojects being delivered as part of the PAC programme.These projects aim to maintain, renovate and expandthe port system to make it more dynamic andcompetitive. One of the main investments beingimplemented through PAC is the National DredgingProgramme which will see around £450 millioninvested in deepening access channels and terminals,increasing capacity to receive larger ships, andincreasing cargo movement capacity.

The SEP/PR publishes all international tenders on itsportal (in Portuguese):www.portosdobrasil.gov.br/editais/concorrencia/licitacao-internacional/licitacoes-internacionais

Although much of the ongoing investment in the portsystem is not directly linked to preparations for theWorld Cup in 2014, there are specific projects aimed atredeveloping the port areas of certain cities, forexample in Rio de Janeiro and Porto Alegre, in time forthe competition. In addition there are also proposals ina number of host cities, such as Rio, Manaus and PortoAlegre, to provide additional accommodation for fanson cruise ships docked in the ports and thereforefacilities in those ports will need to be able to copewith a large influx of additional visitors.

Opportunities in the ports sector in Brazil include:equity investments, debt underwriting, construction &engineering services, equipment supply, environmentalservices, insurance, dredging services, weighing stations,toll-booths, security monitoring equipment andsecurity systems, and legal services among others.

For further information on the ports sector in Brazil, or any projects mentioned below please contact:

Rachel AzevedoUK Trade & InvestmentBritish Consulate General284 Praia do Flamengo22210-030 Rio de Janeiro, RJ BrazilTel: +55 21 2555 9655/22Fax: +55 21 2555 9670Email: [email protected]


PORTS


National/PAC

The PAC programme includes a large number ofprojects on ports around the country, including theNational Dredging Programme. The table below showsprogress on the dredging programme, to July 2009.Much of the work is already underway.

Source: Presentation from Casa Civil (Brazilian Cabinet Office) July 2009

PortTender

PublicationBeginning of the

workDepth (m)

Dredging Demolish Total Estimated(£ Million)Volume (m2 thousand)

Aratu 06/03/2009 27/07/2009 15 3,300 5 16

Salvador 12.0/15.0 2,986 – 16

Natal 06/03/2009 03/08/2009 12.5 2,079 25 10

Rio de Janeiro 13/03/2009 10/08/2009 13.5/15.5 3,500 – 50

Itaguaí (phase 2)

20/03/2009 29/06/2009 17.5 4,900 – 43

Vitória 31/03/2009 12/09/2009 14 1,866 96 31

Imbituba 03/04/2009 31/08/2009 13 850 – 1

S. F. do Sul 17/04/2009 30/09/2009 14 3,200 72 29

Cabedelo 24/04/2009 30/09/2009 11 1,996 225 35

Suape 30/04/2009 30/09/2009 20 4,889 362 80

Angra dos Reis 31/05/2009 30/09/2009 10 100 – 2

Paranaguá 31/07/2009 31/12/2009 16.0/15.0/14.5 9,000 – 39

Itajaí 30/09/2009 31/01/2010 12.0/12.5 3,060 – 8


Other projects to expand and modernise Brazil’s portsystem are included in the PAC programme. Projectswhich are undergoing development and preparatoryactions include the following:

Project: Construction of new dock at Itaqui Port (Maranhão State)

Value: £27 millionFunding source: Federal Government (PAC)Timing: Project under developmentOpportunities: Engineering and construction

services, IT systems, logistics, port equipment

Project: Expansion and modernisation ofAreia Branca salt extraction terminal(Rio Grande do Norte State)

Value: £50 millionFunding source: Federal Government (PAC)Timing: Project under developmentOpportunities: Specialist services and

equipment supply

Project: Expansion and renovation ofcommercial docks at Vitória port(Espírito Santo State)


services, planning & redevelopmentservices, IT systems, logistics, port equipment

Project: Construction of new dock at São Fransisco do Sul Port (Santa Catarina State)


services, IT systems, logistics,port equipment

Project: Modernisation of the public quays ofPorto Novo (Rio Grande do Sul State)


services, port equipment

In addition preliminary studies are being undertakenfor the following projects:

Project: Development plan for theinfrastructure and road/rail access to Santos port (São Paulo State)

Value: Not knownFunding source: Federal Government (PAC)Timing: Preliminary studies in progressOpportunities: Transport consultancy services,

rail services, engineering andconstruction services, planning & redevelopment services

Project: Construction of a new multi-useterminal at Vila do Conde (Pará State)

Value: Not knownFunding source: Federal Government (PAC)Timing: Preliminary studies in progressOpportunities: Engineering and construction



Host city projects

Porto Alegre

Project: Regeneration of ‘Mauá Wharf’ or Cais Mauá

Value: £165 millionFunding source: PPPTiming: International construction tender to

be published by the end of 2009,works expected to start early 2010

Opportunities: Capital investment, construction services

One of the priority projects for Porto Alegre inpreparation for hosting World Cup matches in 2014 isthe redevelopment of the docks along Cais Mauá whichsits on the River Guíaba. The proposals for the 2.5kmstretch will see the construction of commercial buildingsand the renovation of warehouses into bars, restaurants,shops and cultural sites. The project will require around£165 million capital investment, which will be financedthrough a PPP.

The project is undergoing approvals and obtainingenvironmental and other licences. The Rio Grande doSul State Government is expected to publish aninternational tender for the project before the end of2009. Technical and economic studies have beencarried out by a consortium led by M.Stortti BusinessConsulting Group, and these will inform the masterplanand documentation for the construction tender.

Recife

Project: Construction of a passenger terminalat the Recife City Port

Value: £30 millionFunding source: PPP; Federal GovernmentTiming: Bidding process likely to begin in

second half of 2009, terminal to beoperational by 2010-11

Opportunities: Engineering and constructionservices, specialist consultancyservices, port equipment

The project, which has been developed by architect MoisésAgamenon, will occupy an area of 18,700sq metres. It willtransform existing warehouses into buildings for thepassenger terminal. The Pernambuco State Government isin discussion with the Special Ports Secretary and privateinvestors to finalise the financing structure for the project.


Rio de Janeiro

Project: Redevelopment of Rio Port – Phase 1Value: £100 millionFunding source: City government & private sector

investment (investors being sought)Timing: Bidding process closed July 2009Opportunities: Specialist consultancy services,

port equipment

Project: Redevelopment of Rio Port – Phase 2 onwards

Value: c. £1 billionFunding source: largely private sector investmentTiming: ongoing, projects being developedOpportunities: Capital investment, transport

consultancy services, rail services(especially light rail), engineering andconstruction services, specialist portequipment, planning &redevelopment services, renovationconsultancy services

The Prefeitura or City Government of Rio has beenworking on a large regeneration project for the port of Rio – ‘Porto Maravilha’ or ‘Marvelous Port’ – for a numberof years. They are approaching what is a huge undertakingin a number of stages in order to manage the inevitablefinancial and political constraints that occur when dealingwith large-scale projects. The current administration’svision for the port is to regenerate both the port itself, andthe surrounding part of the city.

The port holds a prime location within the city, very closeto the ‘centro’ business area, sitting in between theinternational (Galeão) and domestic (Santos Dumont)airports, and being close to the main bus station in Rio.The area was historically an important part of the city, andis home to many examples of eighteenth centuryarchitecture. However, it is severely under-utilised and run-down, and tourists and locals alike tend not toventure to the area. The city hope to reverse this decline,and indeed make the port a focal point in the city onceagain. The aim is to increase the port’s capacity, while alsoimproving infrastructure and facilities which will make itattractive for visitors and residents.

Plans include the redevelopment of the once grandeighteenth century buildings overlooking the port area,with a view to generating income from the sale of sites for development for residential and commercial use. Themasterplan for the area designates sectors for residentialuse, including areas for social housing, sectors forcommercial use, green spaces, and ‘cultural’ spaces. Forexample there are plans to create two new museums whichwill be housed in buildings alongside the port.

The whole area is around five million sq metres andestimates suggest that the total investment required totransform this area is around £1 billion. However, officialsare hoping that the majority of this will come from privatesector investors, and they are in the process of seekinginterest from potential investors. The first phase of theproject has been developed and will be contracted shortly.However, there remains a large area for which proposalswill need to be developed.

The Rio City Government is keen to explore transportalternatives within and into/out of the area. Currently theonly urban mobility solution servicing the area is the busnetwork, despite the fact that it is close to all the maintransport hubs of the city. The city government areparticularly interested in a light rail or tram solution, whichwould link both the airports as well as the main railstation. Brazil has little experience with light rail systems todate, and therefore officials and politicians alike are eagerto meet with international companies who may beinterested in investing in a transport system, or who maybe interested in forming partnerships to develop solutions.

Tenders for the first stage of the project were launched inJune 2009 and closed at the end of July 2009. This firstphase will involve the redevelopment of a 90,000sq metresarea adjacent to the port, including the renovation of apier and the urban regeneration of the surrounding streetsincluding implementation of a new drainage system,repaving of streets, improved street lighting, provision of street furniture, improved accessibility of pedestrianwalkways, landscaping, signage and so on. The project alsoincludes the restoration and renovation of two buildingswhich originate from the eighteenth century. In addition aproposal is being developed for a private sector operatedunderground car park. The first phase is expected torequire around £100 million capital investment.


Rio de Janeiro continued

Project: Construction of a new port in Rio de Janeiro State

Value: c. £1 billionFunding source: Private investmentTiming: Completion by end 2011Opportunities: Consultancy services, engineering


The new ‘Super Port Açu’ will be one of the largestports in Brazil with a total area of 78 million sq metres,ten berths, and a depth of 18.5 metres. It will havecapacity to handle around 100 million tons of cargoper year. The port complex is being developed andconstructed by LLX, part of the EBX Group, and Anglo-American. It will become a major hub for the south-east and central-west regions of Brazil. Constructionbegan at the end of 2007, and it is expected that theport will be in operation from the beginning of 2012.

A large industrial area will surround the port itself,which will include an iron ore terminal, a steelworks,power stations, cement works, petro-chemical plant,vehicle production factories, and other industrial plantto process exports and imports.

Project: Construction of a new privatelyoperated port in Rio de Janeiro State

Value: c. £500 millionFunding source: Private investmentTiming: Works expected to start once

licences have been approved, likely in early 2010

Opportunities: Engineering and constructionservices, IT systems, logistics, port equipment

Porto do Sudeste which is also being constructed byLLX will primarily export iron ore for its sister companyMMX, and import coal. It will have a depth of 18.5 million and a total area of 510,000sq metres.


Overview

The Brazilian railway system has almost 30,000km ofrailway tracks, concentrated in the south, south-east, andnorth-east regions of the country. This compares with anetwork of around 16,000km in Great Britain and64,000km in Germany. The majority of the networkoperates on narrow gauge, and is almost exclusively usedfor freight transport.

The Railway Act of 1995 set the framework for privatisingthe Brazilian railway system and established the currentindustry structure. Between 1999 and 2007, the formernational rail operator (Rede Ferroviária Federal SociedadeAnônima) was broken up and services are now operatedby a variety of private and public operators. The system isdivided in regional networks, each network beingcontrolled by a different operator.

During the last ten years, investments by rail freightconcession holders have provided a significant increase inthe amount of cargo (tonne/km) transported in Brazil aswell as an increase in the rail traffic safety. Publicresources are no longer required to cover chronic costdeficits, and private investment has been growingincreasingly since privatisation.

The Government has committed to extending andimproving the rail network via the PAC programme whichallocated around £2.5 billion to the rail sector (notincluding urban rail transport) until 2010. This will fundconstruction of 2,518km new railways, primarily the‘North-South railway’, the ‘New Trans-Northeasternrailway’, and the ‘West-East integration railway’ which aim to create an integrated network of wide gaugefreight rail across the country. Despite the recent growthof the freight rail system, there are currently no long-distance passenger railways in Brazil. This is set tochange, however, with the construction of a new highspeed link between Rio de Janeiro and São Paulo, whichpoliticians in Brazil are hoping will be completed by theWorld Cup in 2014.

Many of the original railways built in Brazil in thenineteenth and early twentieth centuries were built byBritish engineers. More recently Brazil has tended towork with other international partners such as France,Canada, and Italy. However, UK companies are nowbeginning to identify opportunities where they can shareexpertise and win contracts in the Brazilian market,particularly by providing specialised consultancy services.For example Halcrow recently completed feasibilitystudies for the new high-speed rail link (see case studyon the following page).

A more detailed overview of the rail sector is providedby the UK Trade & Investment report ‘UKTI RailSector: Fact finding mission to Argentina and BrazilOctober 2009’.

A copy of the report can be requested from the UK Trade & Investment rail sector team, please email:[email protected] [email protected]


RAILWAYS


For further information on the rail sector in Brazil, orany projects mentioned below please contact:

Rachel AzevedoUK Trade & InvestmentBritish Consulate General284 Praia do Flamengo22210-030 Rio de Janeiro, RJ BrazilTel: +55 21 2555 9655/22Fax: +55 21 2555 9670Email: [email protected]

National/PAC

Project: Construction of a high speed trainlink between Rio and São Paulo

Value: £11 billion projected costFunding source: PPP; Federal Government (PAC)Timing: Feasibility study completed (by

Halcrow) in July 2009, biddingprocess opening in autumn 2009,contract expected to be signed by June 2010

Opportunities: Rail construction, specialistconsultancy services, rail equipmentsupply, legal and financial services,environmental consultancy services

A high-speed link between São Paulo and Rio has longbeen talked about in Brazil. However, the link has nowbecome a flagship political project and the currentadministration is optimistic that it can be completed in time for the World Cup in 2014. Experts remainunconvinced that this timescale is feasible but there isat least a political will to get the project moving.

Halcrow has a small presence in Brazil, with oneoffice in Rio. They have been working on specificdemand driven projects, primarily in the waterand environment sectors. In 2008 IADB, togetherwith BNDES and the Brazilian transport authority(ANTT), commissioned Halcrow to developfeasibility and technical studies for a high-speedtrain to link Rio de Janeiro-São Paulo-Campinas.The official report was successfully delivered inJuly 2009 and included demand and revenueforecasts, operational costs, constructiontechnology options and rolling stock comparisonsfor the Brazilian high-speed train. Since thenHalcrow’s profile in the Brazilian market hasincreased greatly, gaining national mediacoverage. They have since been invited to joinnew infrastructure project partnerships in Brazil.Halcrow is now considering reassessing their sizeand presence in Brazil in light of this success.

Halcrow has been involved in major rail projectsaround the world for over a century. It is a leadinginternational consultancy operating in over 80countries worldwide from a network of 90 offices(including 28 in the UK). With over 8,000 technicaland professional staff, they specialise in all aspectsof rail development, which is complemented bycomprehensive expertise in transport, property,environment, power and water. Halcrow havecompleted rail related commissions for governments,transport operators, financial institutions, privateorganisations and joint-venture partners throughoutthe world. Halcrow skills cover the entire project life-cycle – from demand forecasting and feasibility,through to design, supervision, maintenance andoperation. Their current portfolio of rail projectsincludes Crossrail and High-Speed 1 in London,Poland’s first high-speed railway, the Delhi AirportMetro Express Link and recently the Brazilian high-speed rail project.

CASE STUDY

© Image Courtesy of Rail Images


The line, whose total extension will be 511km, is likelyto have an ‘express’ service which will link the twomain cities, the journey time will be 94 minutes. Other stops will include Campinas (in São Paulo State),Campinas and Guarulhos airports in São Paulo State,and Galeão International airport in Rio.

The Governor of São Paulo is preparing legislation toenable the creation of a state company which will beresponsible for supervising the construction of the highspeed train. It will be sent to National Congress forapproval in the coming months. The company will befocused on engineering and technology, and will bestaffed by highly qualified professionals. It will report to the Ministry of Transport and will be responsible for co-ordinating the process of technology transfer, one ofthe prerequisites of the bidding companies. The publiccompany will also undertake the land appropriationswhich will be necessary for construction of the line. It is envisaged that the company will be established by the middle of 2010, before the start of works.

Feasibility studies undertaken by Halcrow have beenmade available on the website below, in advance of theformal tender being published. The assessment of thebids will not only take into account the price of thejourney, but will also consider nature of the technologytransfer to Brazilian institutions, the amount of publicfunds needed for the construction, and the timescale forcompletion. The winning bid will be the one which offersthe most robust financing. BNDES have committed toproviding around £6.75 billion in financing. In parallelthe Agência Nacional de Transportes Terrestres (ANTT),the responsible authority, will also contract consultants to carry out an Environmental Impact Assessment. Theassessment can only be undertaken when the preciseroute of the line is known.

Governments and companies from Japan, South Korea,China, Germany, France, Italy and Spain have alreadydemonstrated interest in participating in the tender,and have visited Brazil to make contact with potential partners.

Further information on the project is available at:www.tavbrasil.gov.br/DocumentacaoIngles.asp

Project: Concession for a 1,535km stretch of the North-South railway

Value: £900 millionFunding source: Federal Government (PAC)Timing: Concession tender to be published

in second half of 2009Opportunities: Rail construction, rail consultancy

services, rail equipment supply, legaland financial services, rail operators

A stretch of 1,535km wide gauge railway will beconstructed, with a concession period of 30 years.

Project: Construction of 1,444km East-WestIntegration Railway

Value: £600 millionFunding source: Federal Government (PAC)Timing: Concession auction in second

half of 2009Opportunities: Rail construction, rail consultancy

services, rail equipment supply, legaland financial services, rail operators


Overview

Urban mobility is what most experts are considering tobe the key challenge for Brazil in preparing for the WorldCup in 2014. Most large cities in Brazil suffer from heavycongestion, and none of the major airports currently havea rail link to the centre of the city they serve.

The Government is addressing the problem by creatingwhat some people are calling the ‘PAC da Copa’. It isexpected to be called the ‘PAC da mobilidade’ or ‘UrbanMobility PAC’ when it is published by the Government,as it is likely to focus on projects to improve urbantransport. Each state which will be hosting World Cupmatches is submitting its proposals for projects toimprove, among other things, the mobility in the city.The Government will make an assessment of thepriorities and allocate funds to those projects. Projectswill only be included which will realistically be completeby 2014, but equally the Government are keen to avoidinvesting in projects which will not have sufficientdemand post 2014 to be economically viable.

For further information on this sector in Brazil, or anyprojects mentioned below please contact:


Host city projects

Belo Horizonte

Project: Expansion of the metro network inBelo Horizonte of 33.5km

Value: c. £1 billionFunding source: Not known; potentially Federal, State,

City Governments and private sectorTiming: Feasibility studies began

September 2009Opportunities: Investment opportunities, operation

and management services, railconsultancy services, signalling, railequipment supply, systems andcomponents supply, rolling stock,safety and security services, financialand legal services

In February 2009 the Minas Gerais State Governmentpresented a project to the Federal Government, tocreate a PPP for the metro system in Belo Horizonte.They are keen for the project to be included in the PAC da Copa being developed by the Government. The proposal would see investments in the system of around £1 billion by 2013, divided between theFederal (£500 million), State and City Governments(£200 million), and the private sector (£350 million).

The project would enable the system to transport morethan 800,000 passengers per day, an increase of around650,000 from the current capacity. The proposalincludes the construction of a 21km Line 2, a 12.5kmLine 3 – which would facilitate access to theinternational airport and the Mineirão stadium, and anextension of 6.6km to the existing Line 1. The projectto extend Line 1 is included in the current PACprogramme, and is already under construction andexpected to be completed by June 2010.

In August 2009 the Federal Government allocated £5million to the Brazilian Urban Train company, CompanhiaBrasileira de Trens Urbanos (CBTU), to develop technicaland economic studies for the construction of Lines 2 and3. Enerconsult S/A will be carrying out the studies,resuming work under a contract originally signed in 2004.


URBAN MOBILITY

Brasília

Project: Brasília IntegradaValue: £150 millionFunding source: Distrito Federal State GovernmentTiming: Design phase to commence

autumn 2009Opportunities: Construction and engineering services

Brasília has recently launched a new project to improveurban mobility in the city – ‘Brasília Integrada’, basedon integrating the bus, metro and other transportsystems. The programme proposes construction of 17 bus stations, and renovation of a further 14. It alsoincludes establishing bus lanes, automatic ticketing, thecreation of an operational control centre, introductionof cycle lanes and at the same time increasing theorganisational and governance capacity of the urbantransport system.

The Distrito Federal State Department for Transportinvited expressions of interest from engineering/architectural consultancies in June 2009 to develop andmanage a series of these projects. The State made a bidto IADB to support the programme. The bid estimatedthe total cost of the project to be around £150 million,and requested a loan from IADB for £100 million.

Project: Construction of a new tramwayValue: c. £500 millionFunding source: Distrito Federal State Government,

AFDTiming: Feasibility studies being undertaken

and financing being put in placeOpportunities: Rail equipment supply, systems and

components supply

This proposal is for a new transport system which willlink the main artery of the city, Avenida W3 Sul, withvarious other points including the international airport.It is planned that the tram will transport between15,000 and 18,000 passengers per hour, in eitherdirection. W3 Sul currently receives around 60,000 carsper day, and 800 buses. The new system will integratewith the existing metro network, and expected toreduce car traffic by 30 per cent. Due to be completedin 2014, in time for the FIFA World Cup, Line 1 will be22.6km long with 24 stations. A 6.5 km southernsection will connect the international airport to themetro network.

In June 2009 Montpellier’s transport authority,Transports de l’Agglomération de Montpellier (TAM),signed a partnership agreement with the BrasíliaFederal District to provide technical consultancy for sixyears during construction of the tramway. The Brastramconsortium, which includes Alstom Transport, has beencontracted to build phase I of the network. The firstsection will cost around £250 million and is due toopen in 2010.

The French development agency, Agence Française de Développement (AFD), has committed to financingpart of the project, in the form of a loan of around£120 million. This represents half the total investmentrequired for phase I. ADF will also provide a further£310,000 for Montpellier’s technical assistance. Theremainder will be financed by the State Government.

Concerns have been raised about the environmentalimpact of the project on Brasília’s urban architecture,which is a UNESCO world heritage site.


Cuiabá

Project: Construction of a new transportsystem (model to be decided)

Value: Not knownFunding source: Not knownTiming: No decision taken to date on model,

feasibility studies and proposalsbeing developed

Opportunities: Investment opportunities, operationand management services, railconsultancy services, signalling, railequipment supply, systems andcomponents supply, rolling stock,safety and security services, financialand legal services

Alternative transport solutions are under discussion inCuiabá, among them the construction of a tramway, amonorail, or a metro. The tram proposal would seeconstruction of an 11.5km stretch, which it is estimatedwould cost around £600 million.

Systra completed a feasibility study in 2006 into theviability of such a project which estimated that thedemand for this transport system could be in theregion of 20,000 passengers per day.

Curitiba

Project: Construction of the first metro line in Curitiba

Value: c. £650 millionFunding source: PPP; Curitiba City Government,

Federal GovernmentTiming: Initial studies have been completed,

technical and economical studiesbeing developed to inform PPP process

Opportunities: Investment opportunities, operationand management services, transportconsultancy services, rail consultancyservices, signalling, rail equipmentsupply, systems and componentssupply, rolling stock, safety andsecurity services, financial and legal services

A project to build the first metro line in Curitiba isbeing developed by the city government, although it isexpected to be financed through a PPP. The 22km linewill link the north and south sides of the city, and willhave 22 stations.

The project has been the subject of a public consultationprocess managed by the Curitiba government, who haveopened up a dedicated website for submissions frominterested parties and which also makes availableinformation from preliminary studies. The portal can beaccessed from 2 September to 31 October 2009 at:www.metro.Curitiba.pr.gov.br

In parallel technical, economical and environmentalstudies will be carried out as a basis for the finalproject tender which will include construction of theline, acquisition of rolling stock and other equipment,and operation of the system.


Fortaleza

Project: Construction of a new metro systemValue: £370 million (first phase £230 million)Funding source: First phase in PAC; future phases

not knownTiming: First phase under construction, to

be in operation in 2011; future phasesnot known

Opportunities: Rail consultancy services, signalling,rail equipment supply, systems andcomponents supply, rolling stock,safety and security services, financialand legal services

A £230 million project, the South Line, is the first phasein a larger programme to construct a new metro systemin Fortaleza. The system will largely be developed byupgrading and modernising existing railways, and willextend 43km, most of it above ground. The three initialstages of the project will cost around £370 million.

The South Line is under construction as part of thePAC programme. The project includes not only theupgrading of 24km of existing line, but also theinstallation of new signalling and telecommunicationsnetworks, and the acquisition of rolling stock for thenetwork. In January 2009 the project received a further£14 million boost from the additional fundingallocated to PAC. The line is expected to be in fulloperation by the end of 2011.

Manaus

Project: Construction of a new monorailtransport system

Value: c. £320 millionFunding source: Federal Government, BNDES,

IADB and private sectorTiming: Preliminary studies completedOpportunities: Investment opportunities, operation

and management services, railconsultancy services, signalling, railequipment supply, systems andcomponents supply, rolling stock,safety and security services, financialand legal services

A monorail, with an initial line of 13.5km in length, willbe built in Manaus in time for the World Cup. The firstphase will have six stations, which will include a stationnear the ground where the World Cup matches will beplayed. PricewaterhouseCoopers have completedfeasibility studies into alternative transport solutions andthis option was selected as the most appropriate. Theproject aims to alleviate congestion in the city while alsosatisfying the requirements for the World Cup.

The system will have an initial capacity of 170,000passengers per day. With further investment it isplanned that the system could be expanded to acapacity of 300,000 passengers per day. It is envisagedthat the monorail will be supplied by ‘feeder’ buseswhich will enable access for a larger proportion of thelocal population.


Natal

Project: Renovation and upgrade of Natal’surban train system into a light rail network

Value: £60 millionFunding source: CBTUTiming: Not knownOpportunities: Management and operation services,

rail consultancy services, signalling,rail equipment supply, systems andcomponents supply, rolling stock,safety and security services, financialand legal services, electrification

Brazil’s urban train company, CBTU, is responsible for a project to renovate and upgrade the existing urbantrain lines in the city, around 53km in length, as wellas the construction of a new line of 3.5km. Stationswill be modified to allow dual-way access, and thesystem will operate with 12 light rail vehicles.Efficiency and service will be improved by theinstallation of new signalling and control systems, and a new telecommunications system.

The project is expected to require investments totalingaround £60 million, and construction work will takeplace over six years.

Porto Alegre

Project: Implementation of a new bussystem, and construction of fournew ‘city gates’

Value: £140 millionFunding source: PPP; Porto Alegre City Government,

Cooperação Andina de Fomento(CAF)

Timing: Tender process expected to begin by the end of 2009

Opportunities: Transport consultancy services,construction and engineeringservices, ticketing systems,commercial property development

In order to improve the urban mobility and reducecongestion in the city the Government have proposed a new system called ‘Portais da Cidade’ or ‘City Gates’.The basis of the system are four ‘gates’ into the citywhich would essentially be large bus terminals wherepassengers would transfer from larger out-of-townbuses, to quicker, modern and less polluting vehicleswhich would operate in the city centre. The gatesthemselves would be similar to shopping centres, withshops, restaurants and other services housed under oneroof. The concept will be part of an integratedtransport system, with an automatic payment system(similar to the Oyster card in London).

The project is being developed as a public-privateinitiative, with the private sector investing in thecommercial aspects of the gates. The total cost isexpected to be around £140 million, of which £75 million is expected to come from the private sector.The project has been in discussion since 2007, althoughthe financial structure is still to be finalised. It isexpected that the bid process will begin before the endof 2009, with work being completed within three years.


Project: Extension of metro Line 1Value: £220 millionFunding source: Federal Government (PAC)Timing: Under construction, planned for

completion by 2012Opportunities: Suppliers of specialist equipment

and services

As part of the PAC programme the metro in PortoAlegre is currently undergoing an expansion, to add astretch of 9.3km to the existing line (Line 1). Around£220 million will be invested via the project, over fouryears. The project has been tendered and the winningconsortium (made up of Odebrecht, Andrade Gutierrez,Toniolo/Busnello, Bombardier, Balfour Beatty and T-Trans) began work early in 2009.

Project: Construction of metro Line 2 ‘World Cup line’

Value: £800 millionFunding source: PPPTiming: Project under development, bid

process expected to open in 2010 withconstruction to begin in early 2011

Opportunities: Investment opportunities, operationand management services,construction and engineeringservices, rail consultancy services,signalling, rail equipment supply,systems and components supply,rolling stock, safety and securityservices, financial and legal services

A new ‘World Cup line’, 15km long, will be constructedto link the city centre with the renovated Beira Riostadium and the Porto Alegre Olympic stadium.Preliminary studies have forecasted a demand of450,000 passengers per day, and estimate the cost ofthe project to be around £800 million. The project willbe delivered via a PPP.

Project: Construction of an 850 metresmonorail to link the airport with the metro network

Value: £10 millionFunding source: To be confirmedTiming: Preliminary studies completed,

awaiting funding decisions beforenext steps

Opportunities: Rail equipment supply, systems andcomponents supply

Another project proposed for inclusion in the ‘PAC daCopa’ is the construction of a monorail shuttle to linkthe airport with the airport metro station, a stretch of850 metres. The project will cost around £10 million.Preliminary studies have been completed and the RioGrande do Sul State Government is now working tosecure financing for the project from the FederalGovernment’s PAC programme.


© Image Courtesy of Rail Images

Recife

Project: Various upgrading and extensionworks on the metro system

Value: £130 millionFunding source: Federal Government (PAC); CBTUTiming: Various projects ongoing; tender for

duplication and modernisation of18km stretch due in second half of2009, acquisition of 12 new light railvehicles to take place by mid-2010


The metro system in Recife currently has two lines, theCentral line and the South Line, and extends 40kmwith 28 stations. The PAC programme allocates fundsto electrify 14.5km of the South Line; duplicate andmodernise another 17.6km of the South Line; acquireseven light rail Vehicles; expand the Central line by5km; modernise 21km of the electrified Central line;construct six new integrated terminals; and renovate 25 electric trains for the electrified lines.

The electrification of the South Line is now complete,and around 15 trains have been renovated and are inservice on the lines. The tender for the duplication andmodernisation of the 17.6km stretch on the South Lineis expected to be published in the second half of 2009.The first light rail vehicles will enter operation in June2010. Once expansion work is completed in November2010 passenger numbers are expected to double toaround 380,000 a day.

While the funding for the works comes from the PAC programme CBTU is responsible for the deliveryof this project.

Rio de Janeiro

Project: Construction of various Rapid BusTransit lanes throughout the city

Value: Total c. £730 millionFunding source: Rio de Janeiro State and City

GovernmentsTiming: VariousOpportunities: Construction and engineering

services, transport consultancy

The State and City Governments of Rio are togetherplanning to construct a number of Rapid Bus Transitcorridors (BRT in Portuguese) to increase the mobilityof the population in Rio for the long-term, while atthe same time providing a cost effective way ofincreasing capacity in preparation for the World Cup in2014 and the Olympic and Paralympic Games in 2016.

The table opposite summarises the proposed projects.

The City Government are negotiating with theFederal Government to include the T5 project in the PAC da Copa.


Project: Construction of a new metro Line 3Value: £450 millionFunding source: Federal and State GovernmentsTiming: Construction to begin in October

2009; competition for operationcontract to open in autumn 2009

Opportunities: Rail equipment supply, systems andcomponents supply, operation andmanagement services

A priority for the State Government is the constructionof metro Line 3, a 23km stretch of surface level metro.The construction and operation bidding processes willbe run separately. A construction contractor has alreadybeen selected. A consortium including Queiroz Galvãoand Carioca Engenharia has already signed the contractfor the construction. The competition to operate theline will be opened in autumn 2009.

Works are expected to start on the line in October2009. The Ministry of Cities has confirmed it willprovide around £16 million for the project, and theState Government has committed £4 million. Another£130 million of Government funding will be neededthis year. The total expected cost for the project isaround £450 million.


Project Length (km) Cost (£m) Project duration (mths) Authority Popn reached (100,000)

Via Light A-B 10.4 9.7 12 State 2

Via Light C 10.8 22.6 12 State 10

Via Light D 3.2 87 18 State 10

Via Light E 5.6 64.5 21 City 10

Marginal Sarapui 24.4 64.5 24 State 15

Corridor T5 28.0 256.5 21 City 10

Link C 14.8 216.1 21 City 3

Red line 7.0 11.3 12 City 5

Source: Presentation by Rio City Government Transport Department (Prefeitura)

Rio de Janeiro continued

Project: Construction of new metro Line 4, to Barra da Tijuca

Value: £900 millionFunding source: PPP; Rio de Janeiro State

GovernmentTiming: Negotiations ongoing, schedule

not knownOpportunities: Rail consultancy services, signalling,

rail equipment supply, systems andcomponents supply, rolling stock,safety and security services, financialand legal services

A fourth metro line will be constructed to link theexisting metro network with Barra da Tijuca, thesuburb of Rio where the Olympic Training Centre andVillage will be built. Proposals for a fourth line havebeen in discussion for decades, and therefore residentsof the city are understandably cynical about whetherthe project will go ahead or not. The project was notincluded in Rio's bid to how the 2016 Olympic andParalympic Games. However, with Barra receiving alarge proportion of new development in the city, andwith limited existing public transport options theGovernment recognises that investment will be requiredto satisfy increasing demand.

A contract for the construction of this line was signedin 1998, with the consortium Rio Barra (led by QueirozGalvão and Carioca Enghenaria). However, funds for theproject were not available at the time and as a result ofstudies completed in the interim the Government nowwants to revise the route of the line from the originalplans. Negotiations between the Government and theconsortium are ongoing to try to find a solution. Thenew plan is estimated to cost around £900 million, tobe provided by State Government investment. The linewould be operated privately.

The project is expected to take four years to complete,and there is a political commitment to finishing it by2014 ahead of the World Cup. But given this tighttimescale construction would need to start before theend of 2009.

Salvador

Project: Construction of 2 lines, total of 36km

Value: Line 1 £150 million; Line 2 not known

Funding source: Federal and State GovernmentsTiming: Line 1 under construction,

Line 2 not knownOpportunities: Operation and management services,

construction and engineeringservices, rail consultancy services,signalling, rail equipment supply,systems and components supply,rolling stock, safety and securityservices, financial and legal services

Construction of metro Line 1 began in April 2000.Opening of the first section was initially scheduled for2003, but after many delays the beginning of 2010 isnow more likely to be the opening date for the first6km section. This forms part of Line 1, a stretch of12km in total, which is part of the PAC programmeand will receive investments of around £150 million. It is being constructed by a consortium of Siemens,Camargo Corrêa and Andrade Gutierrez. It will beoperated privately for a 25 year period with a fleet of11 four car trains supplied by Siemens.

Line 2 will initially be 9.4km long and will link thesuburban rail line with metro Line 1. It will be extendedby a further 14.5km in a later phase of the project. Thisline will link the city centre to the international airport.


São Paulo

Project: Expansion plan for Metropolitantransport system

Value: £6.5 billion over five yearsFunding source: State GovernmentTiming: Ongoing. Individual projects being

developed and constructed.Opportunities: Operation and management services,

construction and engineeringservices, rail consultancy services,signalling, rail equipment supply,systems and components supply,rolling stock, safety and securityservices, financial and legal services

The ‘São Paulo Expansion plan for MetropolitanTransport’ is the biggest public transport project inBrazil’s history. By 2010 the São Paulo StateGovernment will have invested around £6.5 billion inthe system. One of the principle objectives of theproject is to quadruple the ‘metro quality’ networkfrom 61km to 240km. Works will include upgradingexisting lines, construction of new lines, improvementof infrastructure including signalling systems,acquisition of rolling stock and other associated works.Investments have been ongoing since 2007, and arelikely to continue post 2010 (the end of the currentbudgeting cycle). Below are details of projects whichare in progress or in development stages.

Project: Extension of green Line 2Value: £800 millionFunding source: State Government (Metrô-SP)Timing: Under construction, expected to be

completed by 2010; future phasesnot known


Line 2, the green line, will be extended by 4km andwill have three new stations. The capacity of the linewill increase by 50 per cent to 800,000 passengers perday. Future phases of the project will see constructionof a further 7km which will be operated by a lightrailway – the first section is expected to be operationalby 2011, and the second section by 2012.

Project: Construction of a new yellow Line 4Value: c. £1 billionFunding source: PPP; State Government (Metrô-SP)Timing: Under construction, first section

expected to be operational in 2010,second section to be complete by 2012

Opportunities: Signalling systems, rail equipmentsupply, systems and componentssupply, safety and security services

In total the new Line 4 will be 13km in length andwill have a capacity of 700,000 passengers per day.The first section of six stations will be complete andenter operation in 2010. A second section, with afurther five stations is expected to be operational bythe end of 2012. The consortia undertaking theconstruction works are known as Via Amarela andLinha Amarela. They are made up of the followingcompanies: Odebrecht, Queiroz Galvão, CamargoCorrêa, Andrade Gutierrez, OAS, Siemens, and Alstom.The line will be operated by ViaQuatro, a consortiumled by the CCR Group, under a 30 year concession.

Project: Construction of an extension to lilac Line 5

Value: c. £1.5 billionFunding source: State Government (Metrô-SP)Timing: Construction began in August 2009,

expected to be completed by 2012Opportunities: Signalling systems, rail equipment

supply, systems and componentssupply, safety and security services

The extension of the lilac Line 5 will link it to the restof the metro system, and will extend the line itself by12km. 11 new stations will be built. On completion ofthe whole line its capacity will increase from 125,000passengers per day to 650,000 per day.


São Paulo continued

Project: Construction of a new orange Line 6Value: £25 million (engineering projects);

not known (construction)Funding source: State Government (Metrô-SP)Timing: Technical studies in progress; works

expected to start towards the end of2010 and the line should be completeby 2013

Opportunities: Construction and engineering services,rail consultancy services, signalling, railequipment supply, systems andcomponents supply, rolling stock,safety and security services, financialand legal services

When complete the new Line 6, or orange line, will be18km long with 17 stations. In August 2009 Metrô-SPcontracted a number of companies to carry outenvironmental, archaeological, and engineering projectsfor the civil engineering works and super-structuresrequired for the line. Tenders for the construction of theline are expected to open in 2010.

Project: Modernisation and maintenance ofdiamond Line 8

Value: £325 millionFunding source: PPP; State Government (CPTM)Timing: Contract for provision and

maintenance of rolling stock to beawarded by end of 2009


The diamond line, Line 8, will be renovated andmodernised by the end of 2010 through a PPP. Theproject will include the total refurbishment of at leasttwo stations, the acquisition of 24 new trains, and therefurbishment of a further 12 trains. The line currentlytransports around 5,000 passengers per day butCompanhia Paulista de Trens Metropolitanos (CPTM)are also assessing a project to increase the volume ofpassengers by reducing headway between trains, fromeight minutes to five minutes by 2010, and to threeminutes by 2014. This would require further upgradingof the signalling systems.

CPTM will enter into a PPP with a private company tosupply the new trains and refurbish the existing trains.The winning bidder is expected to invest around £300million in the modernisation of the rolling stock.

Project: Construction of Airport Express Line14 (see also Guarulhos train below)

Value: c. £500 millionFunding source: PPP; State Government (CPTM)Timing: Bidding process opened June 2009Opportunities: Investment opportunities, operation

and management services,construction and engineeringservices, rail consultancy services,signalling, rail equipment supply,systems and components supply,rolling stock, safety and securityservices, financial and legal services

The Airport Express, or Line 14, will link the centre ofthe city with Guarulhos International Airport. It isenvisaged to start operation in 2014, in time for theWorld Cup. The price will be fixed at a maximum ofR$35, about £10, and will reduce the journey time to20 minutes – journey times to the city centre arecurrently anywhere between one and more than twohours depending on the level of traffic. Investments ofat least £500 million will be required for theconstruction of 28km of lines, tracks and associatedinfrastructure, as well as appropriations that will benecessary. The São Paulo State Government publishedthe tender in June 2009. However problems with theenvironmental licences meant that the closing date forbids has been postponed (at the time of writing thereis no new deadline).

The Airport Express project is being developed at thesame time as the project to construct a new terminal atGuarulhos airport, which it is expected will increase thecapacity of the airport from 17 million passengers peryear to 29 million per year. The capacity of the AirportExpress will be 19,000 passengers per day.


Project: Construction of a new Line 13,Guarulhos train

Value: £40 million (infrastructure £450 million shared with Line 14)

Funding source: State Government (CPTM)Timing: Bidding process opened June 2009

(linked to Airport Express project)Opportunities: Investment opportunities, operation

and management services,construction and engineeringservices, rail consultancy services,signalling, rail equipment supply,systems and components supply,rolling stock, safety and securityservices, financial and legal services

The infrastructure for new Line 13, or the Guarulhostrain, will be constructed by the winning bidder of thetender for the Airport Express and it will share part ofthe same track as the Airport Express. The line willhave a capacity of over 100,000 passengers per dayacross its 21km length. The line will service the districtof Guarulhos, whereas the airport will be servicedprimarily by the Airport Express. Around £40 millionwill be invested for the common line, and £450 millionfor the Airport Express. Although the Airport Expressand the Guarulhos train will share the same line theservices will be separated. Line 13 will have capacity totransport 100,000 passengers per day.

Project: Construction of new white Line 15Value: Not knownFunding source: State Government (Metrô-SP)Timing: Technical studies in progressOpportunities: Construction and engineering

services, rail consultancy services,signalling, rail equipment supply,systems and components supply,rolling stock, safety and securityservices, financial and legal services

Line 15 will be a 10km stretch incorporating ninestations. It will have capacity to transport 600,000passengers per day. Technical and feasibility studies are in progress.

Project: Construction of a new silver Line 16Value: £330 millionFunding source: State Government (CPTM)Timing: Tender to be published in 2010Opportunities: Construction and engineering


Line 16 will have ten stations and will be 8km inlength. The system will be light rail and will transportaround 250,000 passengers per day. It is estimated thatthe cost of the project will be around £330 million.The track will be elevated to enable the line to runabove existing highways. The trains will be electrified,and will run at the same speed as underground metrotrains. The project will be tendered in 2010, but mustbe delivered by 2014 ahead of the World Cup.

Project: Construction of new gold Line 17Value: c. £400 millionFunding source: State Government (Metrô-SP)Timing: Technical studies in progressOpportunities: Construction and engineering


The gold line, Line 17, will be operated by a lightrailway and will link the metro system with CongonhasAirport and the Morumbi football stadium, where theFIFA World Cup matches will be held. The link betweenCongonhas and the existing metro network will becompleted in 2010, and the whole line will beoperational by 2013.


Overview

By 2006 Brazil had around 1.6 million km of highways, ofwhich around 12 per cent were paved. Highways are themain means of transportation in Brazil, in terms of bothpassengers and freight transportation. Around 60 per centof freight in Brazil is transported by road, with around 20 per cent transported by rail and the rest by waterways.Due to the sheer size of the country, as well as the lackof investment in previous decades, in the late 1990s theGovernment took the decision to bring private sectorinvestment into the sector. Since then a series ofconcessions have been awarded to private sectoroperators. Concessions for future highways are now part of the PAC programme. More details on the scale of these investments are below.

In addition to the large-scale investment in inter-cityhighways delivered through the PAC programme anumber of State Governments are investing inhighways infrastructure, particularly in and aroundlarge cities as traffic pressure increases. The arrival ofthe World Cup in 2014 provides a deadline which manyare using as a lever to obtain funding from the FederalGovernment for highway projects to alleviate citycentre congestion.

For further information on the highway sector inBrazil, or any projects mentioned below please contact:

Valeria MartinezUK Trade & InvestmentBritish Consulate GeneralRua Ferreira de Araújo, 741 – Ground floor05428-002 São Paulo, SPBrazilTel: +55 11 3094 2735Fax: +55 11 3094 2717Email: [email protected]

National/PAC

In total PAC allocates over £10.7 billion to theconstruction and improvement of 45,000km ofhighways across the country. The Government hasproposed 5,300km of new road concessions. This isbeing tendered in stages. The second stage of Phase 1was completed in 2007 and the second stage of Phase 2 in 2009.

The third stage of Phase 1 is likely to be tendered inJanuary 2010. The winning bidder of the concession willbe required to construct 2,066km of new highways, andwill invest over £2.5 billion. The BR-116 will provide aconnection between the south-east and north-east; BR-040 will link the Federal Capital, Brasília, to BeloHorizonte and Rio de Janeiro in the South East; andBR-381 will provide an important connection betweenBelo Horizonte and Governador Valadares which has alarge volume of freight traffic. The table below showshow the total length is broken down:



HIGHWAYS

Phase Highway Length

BR-040 590kmBR-040 109kmBR-040 230kmBR-116 817kmBR-381 321km

Total 2,067km

Phase 1, Stage 3January 2010

Host city projects

São Paulo

Project: Highway concession packages (three lots)

Value: £4.2 billionFunding source: São Paulo State GovernmentTiming: Bid processes will open before the

end of 2009Opportunities: Investment opportunities,

operation and management services, construction andengineering services

1.1 million vehicles drive into São Paulo everyday, 30 per cent of which are trucks bound for elsewhere.This compares to around 400,000 vehicles enteringLondon everyday, of which only around 2 per cent areheavy goods vehicles. In São Paulo 90 per cent offreight is transported by road, although the São PauloState Government have plans to reduce this to around65 per cent, by increasing the use of rail, waterwaysand pipelines. The State plans to invest around £3 billion this year in the transport sector (notincluding metropolitan transport), 95 per cent of which will be on highways.

Between 2007 and the present São Paulo State hascompleted six road concessions. It is likely that anotherthree ‘packages’ of concessions will be competedbefore the end of the year, ahead of elections in 2010(when the Government is not allowed to commencenew projects).

The first lot, the north lot, will be delivered via a PPP.The winning bidder will construct and operate 550kmof highways in the State. It is expected that this lot willrequire investments of around £1.5 billion, of which£0.5 billion will be provided by the State.

The second, south lot will be a simple concession withthe winning bidder being the one who offers the lowesttoll price while committing to investing £210 million.The final lot will be a concession to complete andoperate part of the São Paulo ring-road or the‘Rodoanel’ as it is more commonly known. When it iscompleted the Rodoanel will be around 170kmencircling the city, connecting with ten major highwaysthat lead into São Paulo, allowing traffic that doesn’tneed to enter the city the ability to rotate around it.The western section of the ring-road was completed in2002, and the 64km South section began constructionwork in 2007. In an effort to expedite construction the£1.2 billion project has been divided into five lots,which are being worked on simultaneously by a varietyof construction consortia which include most, if not all,of the large Brazilian contractors.

Tender documents for the north and east stretches arecurrently being prepared, and the São Paulo StateDepartment for Transport are expecting to tender theseas well as operation of the South stretch as oneconcession package by the end of 2009. The totalvalue of this package would be around £2.6 billion andauthorities are likely to stipulate completion by 2014ahead of the World Cup.

There are already Portuguese and Spanish companiesoperating highway concessions in São Paulo State butthe State Department for Transport is keen to promotefurther international competition. Details of tenders areavailable on their website:www.transportes.sp.gov.br/v20/editais/default.asp


Overview

The concept of green building/sustainable constructionis relatively new to Brazil although it is rapidly growingin importance, particularly in the southern states.Private sector projects are increasingly incorporatinggreen principles such as energy efficiency, water reuseand recycled construction materials, as well asintelligent equipment such as smart keys and highsecurity systems. The Brazilian infrastructure industryitself is very keen to change its image and improve itssustainability credentials. In Brazil the UK is seen asone of the pioneers of sustainable construction, andthe industry are interested in our experiences in thesector. The World Cup in 2014 and Rio 2016 willprovide further momentum for the sustainableconstruction movement in Brazil through theirrespective sustainability requirements, and politicalcommitments to ‘Sustainable Games’.

Brazilian Environmental Legislation is advancedcompared to other emerging markets, and SustainableBuilding Certificates such as the US’s Leadership inEnergy and Environmental Design (LEED) and Brazil’sAlta Qualidade Ambiental (AQUA) are being adopted in many projects. There also appears to be someinterest in expanding the presence of the UK BuildingResearch Establishment Environmental AssessmentMethod (BREEAM).

Although there are several large architectural,construction and engineering companies in Brazil thereis potential for UK companies to partner with Braziliancompanies in engineering, architecture and planningservices. Opportunities also exist for consulting servicesin areas such as sustainability and energy efficiency,refurbishment and/or retrofit.

World Cup requirements: Green GoalTM

Before the World Cup in Germany in 2006 FIFA set upan initiative called Green GoalTM which it expects allhost nations to embrace. It is outlined in FIFA’s‘Football Stadiums: Technical recommendations andrequirements’ which includes advice and solutions forachieving sustainable stadiums. The aims of GreenGoalTM are to reduce the consumption of potable water,to avoid and/or reduce waste, to create more efficientenergy systems, and to increase the use of publictransport to FIFA events.

Host cities will be expected to implement therecommendations of the Green Goal concept indesigning both stadia, and transport solutions for theWorld Cup. This will create opportunities for companieswith specialist expertise, including in environmentaldesign, sustainable construction and materials,transport consultancy, energy efficient systems andequipment, and waste reduction.



SUSTAINABLE CONSTRUCTION

Olympic and Paralympic Games requirements

Each Candidate City has to provide details in its bid of itsenvironmental and meteorological features, and theInternational Olymic Committee (IOC) seeks to understandeach city’s approach to sustainability, including in regardto environmental management systems and venueconstruction and development projects.

Rio’s bid created the vision of a ‘Green Games for aBlue Planet’. Its Sustainability Management Plan (SMP)is based on three pillars: planet, people and prosperitywhich will integrate economic, environmental, andsocial elements of the vision.

During Rio’s bid a special environment committee wasestablished to co-ordinate across all three levels ofGovernment. The governments have agreed to createan Olympic Sustainability Division (OSD), a specialpurpose agency which will provide practical operationaldelivery capability during all stages of the Games. Inaddition to developing and co-ordinating the SMP, theRio 2016 Sustainability function will be the point ofcontact to ensure that the IOC’s Technical Manual forEnvironment and Sustainability and Olympic GamesImpact requirements are followed in the SMP andwithin the OSD’s framework.

Guarantees have been provided by all three levels ofGovernment and the relevant competent authorities anddevelopers that all construction work necessary willcomply with local, regional, and national regulations,and with international agreements and protocolsregarding planning construction and protection of theenvironment. An Environmental Impact Assessment (EIA)is required by legislation for any development project.For existing facilities no EIA is required. However,retrofitting assessments introducing sustainabilitybuilding parameters will be undertaken. Rio 2016 willalso incorporate a sustainability code into the pre-selection phase of all providers of goods or services.



Rio 2016 Olympic and Paralympic Games

On October 2 2009 the International OlympicCommittee selected Rio de Janeiro as the host city forthe 2016 Olympic and Paralympic Games.

The main Games locations – including the Olympic and Paralympic Village and the International BroadcastCentre/Main Press Centre – will be located close to eachother and to the Olympic Park in the Barra district ofthe city. Many of the venues to be used were built orupgraded for the 2007 Pan American Games. However,a number of large projects will construct and upgradeother venues and the Olympic and Paralympic Village.UK companies are well placed to take advantage ofopportunities on these projects given the links betweenLondon 2012 and Rio 2016.

As described on page 14 the Maracanã stadium willshortly undergo a major refurbishment, ahead of theFIFA World Cup in 2014. Rio’s Sambadromo, home tothe annual Carnaval parade, and the venue for thearchery competitions and the start and finish of theOlympic Marathon, will undergo a major renovation forthe Games. The João Havelange stadium, built for the2007 Pan American Games, will be the venue forathletics competitions during the Games. A renovationproject will see its capacity increased from 45,000 to60,000. In addition the area surrounding the stadiumwill undergo regeneration as part of a long-termproject to develop the area.

The Olympic Training Centre (OTC) will incorporate twoexisting venues, used for the Pan American Games, aswell as a number of new facilities built in preparation forthe 2016 Games. Another major project will be theconstruction of the ‘X Park’ in the Deodoro region, asports complex that will combine Olympic disciplines withmany of the modern sports that have emerged in recentyears. Other sports venues will be developed as temporaryinstallations, so there will no doubt be opportunities forfirms specialising in temporary structures.

The Olympic and Paralympic Village will be developed inthe Barra area, close to the OTC. It expected that privatesector investment will be needed to deliveraccommodation on the scale required, for example forthe media villages.

For further information on Olympic opportunities inRio please contact:


CASE STUDYAs this report outlines there is a huge amount of workto be done to equip Brazil to be the host nation of the2014 FIFA World Cup and 2016 Olympic and ParalympicGames. This comes against a backdrop of theGovernment committing a huge amount of investmentin infrastructure, to upgrade and expand the system inorder to support Brazil’s continuing growth. There doesnot seem to be a lack of financing for these types ofprojects, whether from the public or private sectors, orindeed a mix of both. However, priorities will beprojects which both provide a legacy for localpopulations as well as providing the required levels ofcapacity and comfort during the World Cup. The scaleof the opportunities make Brazil an attractive prospectfor companies who are willing to find out more.

There are several large multidisciplinary companies inBrazil who have competence in most design,construction and engineering areas. In fact most ofthese also now operate internationally. However, there ispotential for UK companies to partner with Braziliancompanies and offer specialist expertise. Partnering is agood way to enter the Brazilian market and both mid-size and large domestic construction companies areenthusiastic about working with international partnerswho can provide specialised products and services.

Trade with Brazil has historically been dominated by theUSA. However, in the infrastructure sector Spanish andPortuguese contractors have also established themselves,in particular winning large highway concessions. Recentgrowth in the rail sector has attracted internationalexpertise from around the world, and this is set tocontinue with the expansion of urban transportsolutions and the high speed rail link between Rio andSão Paulo. Brazil is increasingly looking to Asia to dobusiness, and indeed China is now Brazil’s biggest tradepartner. Japanese, Korean and Chinese companies haveexpressed interest in participating in the high speed raillink project between Rio and São Paulo. However, UKcompanies are also increasingly seeing the potentialgains on offer in Brazil and some are already takingadvantage of opportunities being presented by theWorld Cup (for example see box on SDG case study).

Steer Davies Gleave (SDG) believe that transport can change the world. They are an independenttransport adviser and for over 30 years they haveworked on transport planning solutions around theworld in the air, at sea, and on land, from advisingon airline ticket pricing and planning cycle ways todeveloping crowd movement and total transportstrategies and solutions for sports stadia.

They have been working across South America for anumber of years, with offices in Colombia, Chile andPuerto Rico, and in May 2008 decided to establishthemselves in Brazil (and Mexico). SDG made contactwith UK Trade & Investment and asked for supportto develop their understanding of the Brazilian sportsmarket, and to develop their network of contacts inthe area. In November 2008 they took part in a UK Trade & Investment Sports Mission to Brazil,during which they had the opportunity to presenttheir work to around 70 local contacts.

Since then SDG have opened an office in São Pauloand are developing business in road concessions, metroextension projects, transport planning and crowdmovement strategies for major events, principallyassociated with the 2014 World Cup. Building oncontacts made through UK Trade & Investment, SDGare establishing relationships with a number of thehost cities and have been contracted to provide crowdmovement and transport planning for the CuiabáArena in Mato Grosso.

‘Brazil has a good business culture and there arehuge opportunities – it is such a large economywith such change going on in terms of thedemands on its infrastructure.

It is very important to make good contact early withlocal partners, organisations like UKTI, who can helpyou understand the local rules and regulations, andhelp you move through those swiftly so that you canfocus on developing business and taking advantageof the opportunities which I think are there.’

Stephen Crouch, CEO Steer Davies Gleave


Conclusions:Business opportunities for UK companies

Most of the major stadia projects for the World Cup2014 have already been, or are in the process of being,designed and most will have bidding processes openingtowards the end of 2009 or the beginning of 2010.Therefore it is unlikely that there will be manyopportunities for large architectural design contracts inthe stadia sector. It is interesting to note that Germanarchitectural companies are involved in a number ofthe twelve stadia projects, taking advantage of theirlink as a former FIFA World Cup host county. However,there may be potential for specialised consulting orengineering firms to be involved in these projects asthey develop, or for instance in the project and costmanagement sector. Of course there will also be manyopportunities for firms who are involved in stadium fit-out such as suppliers of seating, lighting, audio-visual systems, signage, security, turf and so on. Someof the stadia projects incorporate other developmentssuch as construction of adjoining commercial andresidential areas. In most of these cases the responsibleauthorities are actively seeking private sector investorsor developers who are interested in being involved inthese projects.

In the airports sector there will be opportunities in thearchitecture sector as a number of passenger terminalprojects will be designed and constructed over the nextfew years. Other associated opportunities in this areawill be for transport consultancy, masterplanning anddesign, construction and engineering services, airportfit-out, airport equipment and terminal equipment,security services and so on.

As this report outlines, a large proportion of theGovernment funding being provided to prepare for theFIFA World Cup will be directed towards projects toimprove urban mobility. In particular there is a recenttrend towards light rail and tram solutions which seemto be favoured by various state governments. TheGovernment’s PAC da Copa should provide a usefuloutline of planned investments in urban rail transport.It is likely that a number of projects will requiretransport consultancy services, engineering and designservices, project management services, equipmentsupply and potentially opportunities for participationin PPP projects.

There will also be opportunities for investment in largerprojects such as the highway concessions going totender in late 2009. There are already a number ofboth Brazilian and international companies operatingin this sector but given the scale of the opportunitiesmany in Brazil think that there is room for furthercompetition. However, it should be noted that theseconcessions, due to their potential returns, are oftenaggressively competed. Spanish companies have hadparticular success with this strategy.


Brazil can be a daunting prospect, but there exists awealth of opportunities in this huge country. We donot usually advise companies new to internationaltrade to start with Brazil. However, if you areexperienced in overseas trade but new to doingbusiness with Brazil there are many other sources ofuseful information.

A good place to start is the UK Trade & Investmentportal (www.uktradeinvest.gov.uk), which providesdetailed information about Brazil and various sectorswithin the country. Registering on the portal, which isfree, provides you with a number of additional benefits,such as access to business opportunities, sector andmarket reports, and information alerts. You can choosethe information you receive. For example the followingrelated reports can be accessed or requested from UK Trade & Investment:

Building Brazil: Opportunities for the UKConstruction Sector(available from the Construction Sector Team in UK Trade & Investment. Please email your request [email protected])

Brazil Business Guide(available to registered users on UK Trade & Investment portalwww.uktradeinvest.gov.uk)

Other useful websites

British Chamber of Commerce and Industry (Britcham)www.britcham.com.br

ApexBrasil – Brazil Trade and Investment Promotion Agencywww.apexbrasil.com.br

Investment Informationwww.braziltradenet.gov.br

BNDES – Brazil Development Bankwww.bndes.gov.br

Associação Brasileira da Infraestrutura e Industries deBase (ABDIB) – Infrastructure trade associationwww.abdib.org.br

Sindicato Nacional das Empresas de Arquitetura eEngenharia Consultiva (SINAENCO) – Association ofArchitects and Consulting Engineerswww.sinaenco.com.br

Câmara Brasileira da Industria da Construção (CBIC) –Construction Industry trade associationwww.cbic.org.br

Instituto Nacional da Propriedade Industrial (INPI) –Brazilian Intellectual Property Officewww.inpi.gov.br


Further information on doing business in Brazil

LOC – Comitê Organizador Local da Copa 2014(Local Organising Committee 2014)

Ricardo Teixeira, PresidentJoana Havelange, General ManagerRodrigo Paiva, Communications MangerMário Rosa, Institutional Relations ManagerCarlos Langoni, Finance ManagerCarlos de La Corte, Stadium Consultant

Tel: +55 21 3535 9610Email: [email protected]

Belo Horizonte

www.bhnacopa.com.brwww.guiabelohorizonte2014.com

Núcleo Gestor para Assuntos da Copa 2014Copa 2014 Managing Office

Antonio Augusto AnastasiaDeputy Governor of Minas Gerais

Tadeu Barreto, Co-ordinator, Executive Committeefor 2014 World Cup

Fernando Ladeira Fernandes, ManagerWorld Cup 2014 Project

Tel: +55 31 3237 5327/3249 7050Email: [email protected]

Brasília

www.brasilia2014.com.br

World Cup 2014 Brasília Project (Gerência da Copa)

Fabio Simao, Project Co-ordinator and Presidentof the Brasília Football Confederation

Sergio Graça, Manager

Tel: +55 61 3961 4431/7812 5300Email: [email protected] (PA)

Herbert Feli, Brasília Deputy Secretary for Sports

Tel: +55 61 3355 8008/3355 8629

Cuiabá

www.copanopantanal.com.br

Yuri Bastos JorgeState Secretary for Culture and SportsCo-ordinator of the Local World Cup 2014 Committee

Tel: +55 65 3613 4900/01Email: [email protected]

Curitiba

www.curitibanacopa.com.br

Susana Affonso da Costa, ManagerWorld Cup 2014 Project,IPPUC – Instituto de Planejamento e Pesquisa de Curitiba

(Planning and Research Institute of Curitiba)

Tel: +55 41 3250 1313

Fortaleza

www.go2fortaleza2014.com

Ferruccio Petri FeitosaState Secretary for Sports (SESPORTE)

Tel: +55 85 3101 4406/3101 4401/3101 4370Email: [email protected] (PA)

Manaus

www.manauscopa2014.com/index2.phpwww.guiamanaus2014.com

Denis MinevState Secretary for Planning and Managerof the World Cup 2014 Local Committee



Annex:2014 FIFA World Cup host cities key contacts

Natal

www.natalnacopa2014.com

Francisco Vagner Gutemberg de AraujoHead of Cabinet, Rio Grande do Norte State Government

Tel: +55 84 3232 5180/5179Email: [email protected] or [email protected]

Fernando Fernandes de OliveiraSecretary for Tourism and Sports (SETUR)President of the World Cup 2014 Local Committee

Tel: +55 84 3232 2486/2518Email: [email protected] or [email protected]

Porto Alegre

www.portoalegre2014.rs.gov.br

José FortunatiDeputy Mayor and President of World Cup 2014Local Committee (SECOPA)

Tel: +55 51 3289 3675/3289 2014Email: [email protected]

Recife

www.portais.pe.gov.br/web/portalpe/exibirartigo?companyId=communis.com.br&articleId=17124

George BragaState Secretary for Sports

Tel: +55 81 3184.2656/3184 2674Email: [email protected]

Salvador

http://salvadornacopa2014.comhttp://guiasalvador2014.com

Ney CampelloSpecial Secretary for World Cup 2014 (SECOPA)


Rio de Janeiro

www.rio.rj.gov.br/rio2016www.guiariodejaneiro2014.com

Ruy Cesar ReisSpecial Secretary World Cup 2014

Tel: +55 21 2503 4456/57Email: [email protected]

São Paulo

http://morumbi2014.wordpress.com

Caio Luiz de Carvalho, Presidente da SPTurisLuis Salles, Special Advisor for World Cup 2014

Tel: +55 11 2226 0428Tel: +55 11 2226-0402/2226-0403Email: [email protected]

Other websites related to the 2014 World Cup:

www.copa2014.org.brwww.copanobrasil2014.comwww.abdibcopa2014.org.brwww.portal.esporte.gov.brwww.cidades.gov.br


This report was produced by the UK Trade & Investment LatinAmerica Unit in collaboration withthe UK Trade & Investment team inBrazil and UK Trade & InvestmentSectors Group.

Author

Faith Quigley

Contributors

Rachel Azevedo, Sara Pereira, Patricia Barros, Marcelo Tavares,Paula Abreu, Tatiana Santos, Valeria Martinez, Flavia Paolucci,Sueli Coca, Chris Cobb, Denise Pellin,Chris Wall, John Newman,Marcus Archer, Bob Docherty

Disclaimer

Whereas every effort has beenmade to ensure that theinformation given herein isaccurate, UK Trade & Investmentaccepts no responsibility for anyerrors, omissions or misleadingstatements. It is written in generalterms and should be used as aguide only, not as a substitutefor professional advice.

UK Trade & Investment would liketo thank the following organisationsfor their co-operation:

Agência Brasileira de Promoção de Exportações e Investimentos(ApexBrasil)

Agência de Fomento do Estado do Rio de Janeiro (Investe Rio)

Agência Nacional de Aviação Civil(ANAC)

Associação dos EngenheirosFerroviários (AENFER)

Banco Nacional deDesenvolvimento Econômico e Social (BNDES)

Casa Civil da Presidência daRepública

COPPE, Universidade Federal do Rio de Janeiro

Coutinho, Dieques & Cordeiro Arquitetura

Davis Langdon

Deloitte Touche Tohmatsu Brasil

Departamento Nacional de Infra-Estrutura de Transportes (DNIT)

Egis Mobilité

Empresa Brasileira de Infra-Estrutura Aeroportuária (INFRAERO)

Federação das Indústrias do Estadodo Rio de Janeiro (FIRJAN)

Halcrow

Inter-American Development Bank (IADB)

Ministério do Planejamento

Odebrecht

Prefeitura da Cidade do Rio de Janeiro

PricewaterhouseCoopers Brazil

Revista Ferroviária

Rio 2016 Bid Commission

Secretaria de Esporte, Lazer eTurismo do Estado de São Paulo

Secretaria de Estado de Esporte e Lazer do Governo do Distrito Federal

Secretaria de Estado dosTransportes do Governo do Estadode São Paulo

Secretaria de Transportes doGoverno do Distrito Federal

Secretaria de Transportes doGoverno do Rio de Janeiro

Sindicato Nacional das Empresas deArquitetura e Engenharia Consultiva(SINAENCO)

Steer Davies Gleave (SDG)

World Bank: International Finance Corporation

60 IT’S ALL TO PLAY FOR – INFRASTRUCTURE OPPORTUNITIES IN BRAZIL

ACCESSING INTERNATIONAL MARKETS

A range of UK Government support is available from a portfolio of initiativescalled Solutions for Business. The “solutions” are available to qualifying businesses, and cover everything from investment and grants through to specialist advice, collaborations and partnerships.

UK Trade & Investment is the government organisation that helps UK-basedcompanies succeed in the global economy, and is responsible for the delivery of the two SfB products “Developing Your International Trade Potential” and“Accessing International Markets”.

We also help overseas companies bring their high-quality investment to theUK’s dynamic economy – acknowledged as Europe’s best place from which to succeed in global business.

UK Trade & Investment offers expertise and contacts through its extensive network of specialists in the UK, and in British embassies and other diplomaticoffices around the world. We provide companies with the tools they require to be competitive on the world stage.

For further information please visit www.uktradeinvest.gov.uk or telephone +44 (0)20 7215 8000.

Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business,Innovation and Skills (BIS), and the Foreign & Commonwealth Office), accept liability for any errors, omissionsor misleading statements, and no warranty is given or responsibility accepted as to the standing of anyindividual, firm, company or other organisation mentioned.

Published October 2009 by UK Trade & Investment © Crown Copyright.