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Brazil : government promises privatizations and billions in real estate in 2021Posted 2021-06-25
After the pause imposed by the pandemic, Jair Bolsonaro’s government wants to accelerate privatization. Despite the still very deteriorated health situation (more than 370,000 deaths) and the country’s inability to curb a new and very violent wave of the virus.
The three days of auctions launched at the beginning of April for the concession of 22 airports, 5 port terminals and 537 kilometers of freight railroad lines enabled the State to collect 3.5 billion reais (500 million euros). This result, which was considered unhoped-for at a time when air transport has been hit hard, was hailed as a “great victory” by the government.
Diogo Mac Cord on the privatization agenda in Brazil
The Special Secretary for Privatization, Divestment and Markets of the Ministry of Economy, Diogo Mac Cord, recently analyzed the privatization scenario in Brazil, stating that the results obtained by the Executive are exceeding expectations.
“In the government, we have a staff very committed to the Brazil agenda. We are living in a window of opportunity because there are many good people in the government, serious parliamentarians and a society interested in politics. We are in a good time to transform Brazil. On the privatization agenda, the Bolsonaro government has shown a result never seen before”, he said.
According to the figures presented by the secretary this month, from the beginning of the mandate until April this year, the federal government moved R$ 200 billion with the sale of state-owned subsidiaries and with the sale of shares held by the Union and its companies.
“Honestly, there is no part of the government that is opposed to privatization. There are currently 46 state-owned direct-control companies. However, fifteen of them are included in the National Privatization Program (PND). This does not mean that the fifteen will be privatized, but we are studying the possibilities of privatizing them. We cannot look at the 46 organizations at the same time, we must set priorities”, he analyzed.
In two years of office, the administration of President Jair Bolsonaro did not privatize any direct state company. According to Diogo Mac Cord, this is because the process of selling companies is long. “Just by divesting these institutions and profiting from indirect privatizations, we managed to reach R$ 200 billion – which represents a large delivery. Considering the strict meaning of the word ‘privatizations’, I must say that this is a project that takes at least two years to get off the ground. When we arrived at the government, there was no study under development. Between taking the decision to privatize and publish the sale notice, it takes time. Despite this, we will see that the projects will start to be ready from now on”, he concluded.
About the promise of selling R$ 1 trillion in real estate
According to Diogo Mac Cord, this accounting data is real. The state has R$ 1.3 trillion in real estate. And, even with this gigantic volume, they sold something around R$ 100 million per year. The government changed the form and, in one week, they sent R$ 600 million in public notices and about R$1 billion in open interest. The ministry announces that it will soon have another R$ 2 billion in real estate in public notices. It is a speed of opening public notices that has never been seen in the country.
Selling real estate : perspectives for 2022
Government is now working with a goal of R$ 110 billion considering the entire real estate agenda. There are R$ 90 billion in cash and R$ 20 billion in savings.
There are also land regularizations. They are different sales. “There is Vicente Pires and the Sálvia farm, both in the Federal District. These two alone bring together 130,000 people who are occupying the space in an irregular manner. And people are not leaving. Thus, we have the Social REURB for those who cannot buy, but there is the Special REURB for those who can buy, such as rural producers. We have a potential of R$ 500 million to more than R$ 1 billion”, said Diogo Mac Cord.
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