Engineering companies — which used to dominate highway concessions in Brazil — have regained strength, but now with a new profile: by the association of medium-sized construction companies. This type of consortium has become usual in auctions in the sector, especially in state ones.
Of eight state tenders since 2019, five were won by consortiums constituted by medium-sized construction companies — alone or in association with a larger group.
This is the case of the Way 306 Consortium, which won a highway auction in Mato Grosso do Sul at the end of 2019. The group is led by GLP (a Singapore-based logistics company), with participation from engineering companies Bandeirantes, TCL, and Senpar.
The most recent example is last Wednesday’s bid for Rio Grande do Sul’s highways, won by the Integrasul Consortium, comprised of Silva e Bertoli (of Neovia Engenharia) and Gregor (of Greca Asfaltos).
In the federal auctions held since 2019, the pattern that predominates is the relay between CCR and Ecorodovias. Of the five projects in the period, only one was left with a consortium led by Conasa, in partnership with engineering firms Zeta, Rocha Cavalcante, and M4.
On the one hand, the movement of the construction companies brings new players to the market and increases competition. On the other, there is concern about the financial and operational capacity of the companies, according to analysts and companies.
One of the biggest challenges is financial, says Danniel Zveiter, president of the National Association of Highway Construction Companies (Aneor). “The concessions market is very different and involves a complex financial component, both to obtain credit and for the day-to-day financial operation,” he says.
For Igino Zucchi de Mattos, head of Infrastructure at Integral Investimentos, it is important that the groups gather all the necessary skills, which go far beyond the execution of the work. “It is necessary to know how to implement billing, organize the cash flow, and take care of the environmental issues,” he says.
The medium-sized construction company consortiums have been gaining ground, but they are not new. The biggest reference is the concessionaire MGO, composed of nine medium-sized companies, which, in 2013, won the operation of BR-050, between Minas Gerais and Goiás.
At the time, there were doubts about the group’s capacity. In the end, the concessionaire became known for being one of the few to be successful among the contracts bid during president Dilma Rousseff’s administration. In 2018, the construction companies sold the asset to Ecorodovias. Since then, members of the consortium have appeared in different road auctions.
For example, Gregor (part of the group that won last week’s auction) was a shareholder in MGO, as were the three construction companies that partnered with GLP in the Way 306 Consortium. Vale do Rio Novo, another former member, led a consortium that won a lot of highways in Mato Grosso at the end of 2020.
In the past, large construction firms reigned in infrastructure concessions. After the revelation of corruption cases and the economic crisis in the country, most of them withdrew from the contracts and stopped participating in the auctions. The main survivor of this era is CCR, controlled by Mover (formerly Camargo Corrêa), Soares Penido and Andrade Gutierrez — the latter is in the process of selling its stake to Votorantim and Itaúsa.
The exit of the contractors left a void, which was gradually filled by the entry of financial groups and other segments, such as Pátria and GLP. However, with the recent multiplication of road auctions, the perception that it is necessary to attract more groups has gained strength.
“Today, it is necessary to form new highway concessionaires. This can happen by attracting foreigners, but also by developing national players,” says Mr. Mattos. For analysts, there is a risk that not all the construction consortiums will be successful. However, the movement is seen as a great opportunity to form new platforms in the country.
Source: Valor International