Privatization of highways in Brazil: comment on the financial viability

ABSTRACT In this article the author discusses financial questions deemed as key issues, and that should be carefully analyzed in highway privatization projects within the Brazilian reality. Expected returns, compared tariffs, costs, demand and capital structure are the core on this work. The author performs a simulation exercise based on one of the cases most frequently remembered as a candidate to privatization in the State of São Paulo: the system comprising the Anchieta and the Imigrantes Highways, which make a connection between the City of São Paulo and the City of Santos, on the coast. The author’s conclusion indicate that it is a feasible undertaking, provided that some restrictions/innovations are included in its design.