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April 5, 2021

Bids for BR-163 Concession Expected on July 8th

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Brazilian National Land Transportation Agency (ANTT) last week released the details of the concession to operate 1,000 kilometers of Highway BR-163 between the city of Sinop in northern Mato Grosso and the Port of Miritituba on a tributary of the Amazon River. Now that the final paving has been completed, the road will be turned into a toll road to generate funds to maintain and improve the highway. The concession to operate the highway will be for 10 years with an option for an additional two years and the biding auction is scheduled for July 8th at the Sao Paulo Stock Exchange.

The winning bidder will be required to repair, conserve, maintain, operate, and implement improvements to increase the capacity of BR-163. This highway is considered essential for the economic development of the states of Mato Grosso and Para. The concession for this highway is shorter than normal in duration due to the anticipated building of the Ferrograo Railroad between the same two cities. Once the railroad is operational, the number of trucks using the highway is expected to be greatly reduced.

Required improvements of the highway include: adding additional passing lanes on the hillsides, improving the shoulder for emergency parking, reinforcing and maintaining the pavement to extend its lifetime, and improving access to the ports on the northern end of the highway.

ANTT anticipates that there will be three toll plazas along the highway and the total costs of the improvements is estimated at R$ 3 billion (approximately $550 million). The winning bidder will be the company that can offer the lowest tolls while still insuring that the required maintenance and improvements will be implemented.