Brazil's biggest city hit by record traffic jam

SAO PAULO Wed May 23, 2012 11:04pm IST

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SAO PAULO (Reuters) - Commuters sat in lines for more than three hours, protests broke out at a train station, and angry voters promised revenge as Brazil's biggest city entangled itself in a record traffic jam on Wednesday morning, highlighting how the country's infrastructure has failed to keep pace with economic growth.

The trigger for the chaos was a strike by workers for Sao Paulo's subway and commuter train system, who are seeking higher wages.

That prompted virtually any commuter with a car to venture out, a recipe for disaster in a metropolitan area of 20 million people where an expanding middle class means that more than 900 new vehicles hit the streets every day

Despite Brazil's economic gains, government spending on roads, public transportation, airports, seaports and communications has failed to keep pace.

At its peak, 155 miles (249 km) of roads and highways were backed up, according to city transportation authorities. That accounted for more than a quarter of the city's major arteries, and smashed the previous morning rush-hour record of 119 miles.

The all-time traffic record is 183 miles set during an evening rush hour in June 2009.

The spectacle of Brazil's business capital being paralysed by a single, previously announced strike prompted a new round of anger at the government's failure to invest in infrastructure in recent years - a problem that may finally be catching up with Brazil, as its economy has stagnated over the past 12 months.

It also renewed concerns over a possible breakdown on roads, airports, and communications systems when Brazil hosts the soccer World Cup in 2014 and the Olympic Games in 2016.

"Whoever says Brazil is a great (economic) power should come and see this," said Wilson Pereira, a dishwasher, as he watched live images of miles-long traffic jams on TV at a bakery.

One Reuters reporter needed 3-1/2 hours on Wednesday morning to make the eight-mile commute by car to the office - a trip that usually takes about 45 minutes. Another watched as his bus driver, frustrated by the traffic, put the vehicle into park, got out and smoked a cigarette.

The gridlock was so total that police on motorcycles had to clear the way for ambulances to get through on the Marginal Pinheiros, the highway running alongside the financial district.

At a train station in eastern Sao Paulo, police fired tear gas to disperse a crowd of several hundred people who blocked traffic and let the air out of buses' tires to demonstrate their anger at the strike, local media reported.

Other large emerging markets such as China and India have also experienced agonizing traffic as millions join the middle class and acquire cars for the first time.

But Brazil has badly lagged its peers in upgrading its infrastructure, as overall investment only averaged about 17 percent of gross domestic product in recent years, compared to 44 percent in China, 38 percent in India and 24 percent in Russia, according to a Morgan Stanley report.

The result has been bottlenecks throughout the transportation system and the economy. Cash crops regularly rot as trucks wait in miles-long lines leading into Brazil's seaports, which themselves are overwhelmed. Airlines have seen expansion plans thwarted by airports operating above capacity.

Economists say that poor infrastructure, along with high taxes and labour costs, severely hurt the competitiveness of Brazil's economy. The economy expanded only 2.7 percent last year, and a similarly low rate is expected in 2012 - making Brazil one of the slowest growing economies in Latin America, and well below the 5 percent rates that made it a star performer over the past decade.

The strike was itself a sign of a country under strain from years of fast growth.

Local media said the subway and train workers were asking for a pay increase of 14.99 percent in real terms - a raise consistent with Brazil's recent boom years, but much less viable in the current slow economy. The city transport authority is offering a raise of 4.15 percent in real terms.

(Additional reporting by Silvio Cascione and Todd Benson; Editing by Todd Benson and Jackie Frank)

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