Growth of Concessions: market evolution and perspectives

Carolina Caiado

 

Just over 30 years after the enactment of the General Concessions Law (Law 8,987/1995), it is fair to say that concessions have definitively advanced in Brazil. The delegation of public infrastructure services and works over the past decades has proven to be an efficient way to overcome the scarcity of government resources, meeting the country’s investment demands and raising the quality and accessibility of public services.

The growing participation of the private sector in public services through concessions is a constant feature in the leading media outlets. It has become increasingly common to see photos of the winning consortia at concession auctions striking the gavel at B3. Domestic and international groups have shown appetite not only for mature, operational projects, known as brownfield, but also for greenfield projects.

In 2025, according to projections from the recent edition of the Infrastructure Barometer, conducted by EY-Parthenon in partnership with the Brazilian Association of Infrastructure and Basic Industries (ABIDB), there was a 2.83% increase in the total volume of infrastructure investments, reaching R$ 280.0 billion in 2025. The survey also highlights the prominence of private investment, which grew by 5.95%. The private sector expanded its leading role, accounting for 84% of the total R$ 234.9 billion invested.

Support network

Whether through ordinary concessions, governed by the General Concessions Law, or through public-private partnerships (PPPs) in the form of sponsored concessions and administrative concessions, concessions have consolidated as an effective means of granting the private sector the operation of assets and services that require large-scale investments, significantly increasing private sector participation in state-owned services and broadening the reach of public service delivery to citizens.

This outcome results from the improvement in the application of legal frameworks and contractual instruments, particularly with regard to well-structured risk matrices, financing arrangements, and contractual guarantees—both from the private sector to the public sector, in ordinary concessions, and from the public sector to the private sector with respect to its payment obligations, in the specific case of PPPs. Added to this is the consolidation of BNDES’s role as a project structurer, ensuring that concessions become long-term State projects rather than government projects subject to the alternation of administrations.

Another institution essential to the sound performance of public concession policies in the country is the Federal Court of Accounts (TCU). The Court has distinguished itself in the prior review of bid documents for concession auctions, making it standard practice across all administrations to have projects “pre-approved” by the TCU in order to avoid administrative and judicial disputes following the publication of bid notices.

Improvement

Despite the progress made over the past 30 years, we are still far from perfect institutional and legal environments; after all, a bill aimed at restructuring the General Concessions Law and the General PPP Law (Bill No. 7063/2017) is advancing in the Senate.

The reform movements concerning the aforementioned laws reveal the private sector’s interest in engaging with the Legislature to make the legal frameworks more comprehensive, so as to detail to a greater extent the grounds for contract revisions, term extensions, and other matters sensitive to private concessionaires of public services.

We are a country with a positivist tradition, in which the comfort of public officials and the private sector stems from the written law. Although the legal frameworks currently in force are sufficient to enable sound projects—as evidenced by the advancement of concessions—the call for reforms points to legal unease in both the public and private spheres regarding the existing legislation.

Moreover, with the alternation of administrations, significant institutional changes have been witnessed, such as the institutional division of the Ministry of Infrastructure into the Ministry of Ports and Airports, alongside the Ministry of Transportation. Although lawful—since it falls within the Head of the Executive’s authority to organize the direct public administration, i.e., its Ministries and Secretariats—changes of this kind demonstrate the susceptibility of Executive Branch agencies to shifts in administration, resulting in a slower pace of action until the new structure reaches cruising speed.

In this context, enduring institutions predominantly staffed by career civil servants assume a leading role in concessions. Among them are the aforementioned BNDES and TCU. In the case of the TCU, in addition to the prior review of draft bid documents, its growing role in the consensual resolution of disputes between concessionaires and regulatory agencies—which represent the federal granting authority in concessions under the external control jurisdiction of the Court—is noteworthy.

SecexConsenso, the TCU Secretariat created to implement consensual dispute resolution and conflict prevention procedures, has proven successful. Since the beginning of its activities in 2023, the TCU Plenary has ratified 21 agreements brought before the Secretariat.

It should be noted that the Secretariat has been subject to criticism from segments of academia and the press, from the perspective of the powers legally conferred upon the Court as an external control body vis-à-vis the legality of its role as a mediating body for disputes. Nevertheless, the fact that an external oversight authority participates in dispute resolution represents legal certainty, in the view of many private concessionaires.

There is no doubt that much remains to be improved. However, it cannot be denied that concessions have established themselves as sound investments for the private sector, generating employment in the construction and service sectors. One need only look at the interest of private groups in auctions, coupled with the growth of mergers and acquisitions across the various infrastructure sectors.