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Why Brazil Has Turned To Using PPPs To Build Public Works Projects

The municipality of Rio de Janeiro, Brazil, is using a Public-Private Partnership (PPP) to build a number of daycares and preschools. A specialist in infrastructure projects, Felipe Montoro Jens, said that a PPP was the only realistic way these projects were going to get completed. As he explains it private companies will build, operate, and maintain these new facilities. The government will supply the teachers and also school lunches. This project will result in enough facility space to accommodate 20,000 children in daycare centers and 40,000 slots for preschool age children. Visit infomoney.com to learn more.

There are currently several studies going on which are being managed by local authorities. They are being assisted by the World Bank Group’s International Finance Corporation as this organization has a lot of experience planning out these types of projects. Local authorities in Rio de Janeiro are looking at a similar project that was completed in Belo Horizonte, Minas Gerais, in 2012. Felipe Montoro Jens says that a clear line will be drawn between the private companies maintaining and managing these education facilities and the government’s responsibility to educate the children.

The International Finance Corporation has been involved in PPP deals all over the world. Their goal is to help local authorities develop partnerships with private businesses and help expand the public service delivery of various public works projects. They help local authorities and private companies overcome the difficulties that commonly arise in these types of deals. PPPs can last for decades so it is critical everything is hammered out in detail.

Felipe Montoro Jens says that there are situations where both the state and city governments have budget restraints which means they can’t afford to build infrastructure such as daycare centers and preschools. He says that PPPs offer a great alternative so that critical services can be provided to the public that would be impossible for the government itself to build and maintain. He says that how PPPs operate in Brazil was established by a new federal law that was passed in 2004. PPPs results in those in the public sector being able to concentrate on strategic issues while private businesses manage operational and administrative details.

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