Regulation in favor of Private Investments in Brazilian Infrastructure Projects

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Fabio FerreiraFabio FerreiraFabio FerreiraFabio FerreiraFabio FerreiraFabio FerreiraFabio FerreiraFabio Ferreira KujawskiKujawskiKujawskiKujawskiKujawskiKujawskiKujawskiKujawski

MauricioMauricioMauricioMauricioMauricioMauricioMauricioMauricio JaymeJaymeJaymeJaymeJaymeJaymeJaymeJaymee SilvaSilvaSilvaSilvaSilvaSilvaSilvaSilva

June 17, 2010June 17, 2010

Regulation in favor of private investmentsRegulation in favor of private investments

in Brazilian infrastructure projectsin Brazilian infrastructure projectsin Brazilian infrastructure projectsin Brazilian infrastructure projects

I. Why do foreign investors are targeting the I. Why do foreign investors are targeting the

Brazilian Economy?

I. In the coming years, it is expected that I. In the coming years, it is expected that

the Brazilian economy records an yearly

average growth rate estimated at 5.5%

II. Inflation Index at around 4.5%

III. Brazilian nominal and real interest rates III. Brazilian nominal and real interest rates

reached their lowest historical levels in

2009Source: Brazilian Economy Outlook, 5th Edition, March, 2010, Brazilian Ministry of FinanceSource: Brazilian Economy Outlook, 5th Edition, March, 2010, Brazilian Ministry of Finance



II. Remarkable II. Remarkable

Investment

Opportunities in

InfrastructureInfrastructure

a) FIFA 2014 World a) FIFA 2014 World

Cup Brazil

b) XXXI Olympic b) XXXI Olympic

Summer Games in

Rio de Janeiro, 2016



III. Preferred Credit Lines from the Brazilian III. Preferred Credit Lines from the Brazilian

Government in the following sectors:

I. Ports and Airports;

II. High-Speed Train;II. High-Speed Train;

III. Energy;

IV. Logistics;IV. Logistics;

V. Urban transportation.



2007-2010 INVESTMENT FORECAST FOR BRAZILIAN

LOGISTICAL INFRASTRUCTURELOGISTICAL INFRASTRUCTURE

Source: http://www.brasil.gov.br/pac/investimentos/por-acoes/logistica/previsao-de-

investimento-em-infraestrutura-logistica-2007-2010/view



2010 OIL, GAS AND RENEWABLE FUELS

- ACTIVITIES AND GOALS -- ACTIVITIES AND GOALS -

Source: http://www.brasil.gov.br/pac/investimentos/por-acoes/energetica/acoes-em-petroleo-gas-

natural-e-combustiveis-renovaveis-meta-2010/view



2010 URBAN AND SOCIAL INFRASTRUCTURE

ASSISTANCE FORECAST

Source: http://www.brasil.gov.br/pac/investimentos/por-acoes/social-urbana/previsao-de-

atendimento-em-infraestrutura-social-e-urbana-meta-2010/view



Ideal Regulatory Regime Ideal Regulatory Regime

for Attracting Investment

in Infrastructure Projectsin Infrastructure Projects

1. Coherency

2. Independence2. Independence

3. Accountability

4. Transparency

6. Financial and Human

5. Predictability

Resources Capability



1. Coherency: regulation standards shall be consistent with the legal framework that governs consistent with the legal framework that governs

each sector of economy.

2. Independence: political issues shall not 2. Independence: political issues shall not influence regulators activities.

3. Accountability: the regulator independency 3. Accountability: the regulator independency shall be directly related to its obligation of making

its activity accountable.



4. Transparency: all procedures adopted by the regulator as well as its decision shall be published

and available for the general public.and available for the general public.

5. Predictability: Same facts under the same jurisdiction shall be decided in the same way.jurisdiction shall be decided in the same way.

6. Financial and Human Resources

CapabilityCapability: human and financial resources shall be provided to regulatory agencies so they can

establish and execute their policies and accomplish establish and execute their policies and accomplish

their goals.



IV. Does Brazil follow these Ideal Regulatory

Standards?Standards?

I. Coherency: �

II. Independence: � �

�III. Accountability: �

IV. Transparency:�IV. Transparency:�

V. Predictability: �

VI. Financial and Human Resources Capability:�



V. Initiatives to improve the regulatory activities in V. Initiatives to improve the regulatory activities in

Brazil:

I. Improvement of Regulatory Management Public

Program: Issued by Decree nº 6,062/05, this Program: Issued by Decree nº 6,062/05, this

Program intends to:

I. Develop the Brazilian Regulatory System;I. Develop the Brazilian Regulatory System;

II. Improve regulator’s capacity to create and

evaluate public policies;

III. Facilitate the coordination and the strategic

alignment between public policies and regulatory

activities;

IV. Strengthen the Brazilian Regulatory Agencies'

autonomy and transparency.



V. Initiatives to dismantle the stability of the regulatory V. Initiatives to dismantle the stability of the regulatory

model in Brazil:

II. Bill Nº 3337/2004:

I. Establishes the legal framework of Brazilian

Regulatory Agencies

II. Threats to the independence of the Brazilian II. Threats to the independence of the Brazilian

Regulatory Agencies:

1. Public Hearings for all relevant decisions that may

impact the market.

2. Management Contract between Agencies and the

respective Ministries.respective Ministries.

3. Transfer back of legislative powers and

competition related decisions to the Ministries

FABIO FERREIRA KUJAWSKI

[email protected]

MAURICIO JAYME SILVAMAURICIO JAYME SILVA

[email protected]

Rua Dr. Eduardo de Souza Aranha, 387, 15º andar

Phone (55) (11) 38970350

São Paulo/Brazil

Documents

Regulation in favor of Private Investments in Brazilian Infrastructure Projects