Developing Bus Rapid Transit Systems In Brazil Through Public Private Partnerships

Abstract

By the end of the 1970’s, Brazil was leading the implementation of high-flow bus priority schemes. Busways were introduced in cities like São Paulo, Curitiba, Porto Alegre, Belo Horizonte and Goiânia under the coordination of a Federal agency. But the constitutional reform of 1988 delegated most of the Federal attributions back to States and Cities including those related to urban transit transportation, causing the curtailment of a successful national program. Many Brazilian cities are incapable of contracting financial debts to implement public infrastructures and private investments geared towards implementing new urban transport infrastructure are still very limited. In Brazil, there is a great predominance of buses over rail-based technologies in the provision of transit services. The operation of the transit systems is mostly private, with fares covering vehicle capital and operating costs whereas the public sector provides and maintains the infrastructure for operating the bus services. This paper explores new dimensions for the participation of the private sector in the provision of the transit infrastructure based on publicprivate partnership (PPP) schemes conceived for bus rapid transit (BRT) projects in São Paulo and Porto Alegre. The regulatory-normative framework in Brazil is based on the concept that the State should provide only infrastructure services that are essential and when no other source is available. The 1995 Concessions’ Law provided the legal-institutional framework for private participation to proceed on a wider scale in the country. A 2004 law establishes the general rules for PPP and provides for solid public payment guarantees as part of an additional effort to attract the private sector to invest in infrastructure and to eliminate the existing bottlenecks that have put the Brazilian economic development on hold. BRT systems, as opposed to rail-based technologies, have the ability to deliver a high-quality mass transit system within the budgets of even the low income municipalities. It is estimated that only the Brazilian cities with more than 1 million inhabitants present a potential for implementing 590 km of bus corridors. Most of the already existing busway corridors in Brazil need renovation and BRT systems offer the opportunity of increasing transit productivity while overcoming the problems generated by the irrationality of multiple superimposed radial routes converging to terminals located at the city centres. The BRT project of Porto Alegre consists of a diametral route crossing the city centre and linking trunk and feeding interchange terminals being planned to accommodate areas dedicated to retail and service activities. It is expected that these areas shall generate enough revenues to remunerate private investors, under a PPP scheme, for the construction of the terminals and most of the infrastructure required to upgrade some sections of the existing busways to BRT standards. The BRT project for the East-Northeast zone of São Paulo proposes to use value capture mechanisms made legal by the Statute of the Cities, enacted in 2001. These include the concept of an urban operation – a legally defined set of interventions and projects to be carried out within a specific area – and the issue of tradable certificates of additional building rights in the area. In combination, these mechanisms allow the anticipation of the financial resources required to execute the proposed projects needed to raise property values in the region.