* Government raises return to 7.2 pct from 5.5 pct
* Mantega says companies enthusiastic about bidding
BRASILIA May 8 Brazil has raised the rate of
return for toll road concession projects, Finance Minister Guido
Mantega said on Wednesday, providing yet another sweetener for
the private sector as the government scrambles to boost
investment in a sluggish economy.
Mantega said after meeting construction executives that the
government would raise the rate of return to 7.2 percent from
5.5 percent to encourage competition and participation in the
bidding for the concessions, which is expected to start in
"They all (companies) unanimously said that the investment
is very attractive with this rate of return and that they will
participate in the bids," Mantega told reporters in Brasilia.
This is the second time in three months that the government
has yielded to the private sector in a bid to lure companies to
participate in infrastructure projects worth nearly $250
billion. The government is auctioning concessions for public
airports, ports and railways to increase a rate of investment
that is less than half that of emerging nations such as China.
Latin America's largest economy has struggled despite an
avalanche of stimulus measures that include billions of dollars
in tax incentives and cheap loans. Brazilian officials have said
the concessions are crucial to avoid a third year of mediocre
economic growth caused mainly by years of anemic investment.
Under the terms of the concessions, private companies and
investors will be able to buy the rights to publicly owned roads
and charge tolls for their use. The contracts will also
apportion the risks and investment commitments for the
government and the private investors.
In February, Mantega extended the length of concessions and
improved the financing conditions for road projects.
The latest changes also lower the amount of loans that can
be made to a concession operator by a single creditor to 70
percent from 80 percent.