Brazil presidential contenders differ on logistics
Brazil's leading presidential contenders Luiz Inacio Lula da Silva and incumbent Jair Bolsonaro consider logistics a fundamental part of the country's economic development, but their plans for investments and improvements in the sector diverge.
Ahead in the polls, former left-wing president Lula's proposed government plan calls for strengthening public investments, with the state taking the lead, but with the goal of eventually turning projects over to the private sector.
According to Lula, who governed from 2003-2010, the private sector alone has not been able to fill the gap left by the decrease in spending provided by the federal government or the states in recent years. Therefore, an increase in the federal government's spending cap would be necessary.
On the other hand, Bolsonaro supports expanding privatizations of state entities, so the federal government can concentrate on other activities.
The current right-wing president says that his proposal will stimulate the economy and boost the logistics sector's competitiveness, promote competition and lead to more investment, which will consequently improve the quality and reduce the cost of services.
Lula is leading in the polls, with 48pc of tallied voter intentions, 17 percentage points above Bolsonaro's 31pc, according to an Ipec poll, which was conducted from 25-26 September.
Further initiatives
Lula and Bolsonaro's government plans also envision different transportation infrastructure investments.
Lula foresees a two-stage plan. Initially, his project aims to accelerate the national department of transportation infrastructure's (Dnit) activities on federal highways and the West-East Integration Railroad (Fiol), speeding up auctions that are in an advanced stage of structuring — such as the roads in Parana state and port terminals — and renegotiation troublesome concession contracts.
For Sao Paulo state's Santos port — the largest in Latin America — Lula's campaign does not consider privatization to be the best option, as it is concerned that such a move would prompt shipping companies to focus on cargoes that are not in the public interest. Instead, the campaign finds that an initial public offering (IPO) of the Santos Port Authority (SPA) or the concession of specific services, such as dredging, would be better alternatives.
In the long-term, Lula says he will evaluate the concessions portfolio and choose projects that prioritize investments. The plan will rely on public-private partnerships (PPPs) and public banks to act in a system of guarantees for long-term financing.
In contrast, Bolsonaro defends greater integration among the different modes, reducing distances, travel time and production costs. To this end, the candidate's government plan foresees the expansion of rail transport, authorizing private sector stakeholders to build and invest in railroads through the Pro-Rail program. Investments of R224bn ($42.8bn) are planned for 19,000km (11,806 miles) of railroads in at least 16 states.
Bolsonaro also says he will maintain various infrastructure assets' auctions by maintaining Dnit's concessions and seeking regional aviation PPPs and waterway concessions, which will balance the transport matrixes. Also, the incumbent's government plan supports the SPA's privatization project.
The current president's plan also favors the expansion and improvement of coastal shipping and waterways by boosting the BR do Mar project, a law that aims to increase cabotage in the country. The goal is to increase the participation of maritime transportation to 30pc of the country's logistics matrix from 13pc, in addition to leveraging the capacity of the Brazilian maritime fleet dedicated to cabotage by 40pc over the next three years.
Also in that regard, Bolsonaro's campaign envisages the BR of Rivers project, which aims to formalize a legal framework for the country's waterways, extending the scope of riverine navigation to take greater advantage of Brazil's rivers. It also intends to integrate waterways with other modes of transportation through specialized ports, creating a nationally integrated logistics system.
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