Implementing PPP contracts in transport infrastructure in Brazil

As demand for transport investment increases, governments seek the private sector for co-operation on the field of infrastructure investments and service supply by means of public private partnerships (PPP). By definition, PPP recognises that both the public and the private sector have certain advantages relative to the other in the performance of specific tasks. By allowing each sector to do what it does best, public services and infrastructure can be provided in the most economically efficient manner. This proposed paper analyses the implications of the PPP model for legislative reform and for the design of contracts. Initially, it summarizes the main issues arisen in legal reforms, following the international experience, pointing out the critical components of any successful PPP as well as the key legal obstacles for the adoption of PPP initiatives. Subsequently, the new Brazilian legislative bill on PPP contracts is discussed and compared with other procurement procedures foreseen in the national legislation. The key questions that will focus the discussion are, at a first moment, the confrontation of the Code Law influenced bureaucratic control on procurement procedures and the need for a more negotiated approach both in contract design and in the procurement procedure. Secondly, the effects for the control of public finance and accountability are discussed. The paper ends analysing the potential market created by the new legislation for the investment in infrastructure. This paper is part of the research project called \u27Regulatory and institutional reform on transportation industry in Brazil\u27, sponsored by the Brazilian Ministry of Science and Technology, the Transportation Ministry and the Brazilian National Surface Transport Regulatory Agency and involves researchers from five public universities in Brazil