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Highway of death, which has had more than 7 THOUSAND accidents in recent years, is auctioned and the winning company will have to invest 9 BILLION in the location

Written by Alisson Ficher
Published 10/09/2024 às 11:33
The famous and feared BR-381, known as the “Highway of Death”, is about to undergo a gigantic transformation.
The famous and feared BR-381, known as the “Highway of Death”, is about to undergo a gigantic transformation.

A historic auction has finally taken place after years of failed attempts. The famous and feared BR-381, known as the “Highway of Death”, is about to undergo a gigantic transformation.

A estrada, which has accumulated tragedies and accidents over the years, now raises hopes. The future of BR-381, however, involves billions of reais and a decades-long commitment.

On August 29, a milestone was recorded at B3's headquarters in São Paulo: asset manager 4UM won the concession for a stretch of approximately 300 kilometers of BR-381, connecting Belo Horizonte to Governador Valadares, in Minas Gerais.

After three failed attempts, a company finally took on the challenge of investing heavily in the recovery and improvement of one of the most dangerous highways in Brazil.

The contract, which will be valid for 30 years, foresees a total investment of R$9 billion, with R$5,6 billion earmarked for works and improvements, and another R$3,7 billion in operating expenses.

According to the information released, the auction was fierce, with two new companies in the road sector competing for the concession: 4UM and Opportunity.

The winning proposal offered a 0,94% discount on the basic toll rate. For the single lane, the initial value was R$16,04 per 100 km, while for the double lane, the base value was R$22,46 per 100 km.

Why is BR-381 so problematic?

This highway has earned the nickname “Highway of Death” due to the high number of fatal accidents that occur along its route.

According to the National Transport Confederation (CNT), in 2023, BR-381 was classified as the sixth most dangerous highway in Brazil, in terms of accidents and deaths.

This reality, combined with its poor conservation, led the government to seek partnerships with the private sector to try to reverse this scenario, even after several failed attempts.

According to the Minister of Transport, Renan Filho, the focus of the project is not only on the discount offered by companies, but also on implementing improvements.

“There is no point in having a significant discount if the works are not delivered as promised,” declared the minister, emphasizing the need to carry out works that have a real impact on the safety and quality of the highway.

For Renan Filho, the fact that there were two competitive proposals demonstrates that the project was well structured and has the potential for success.

Newcomers take on a monumental challenge

This auction also marked 4UM's debut in the highway concessions sector. The asset manager, which has over R$7 billion under management and is headquartered in Curitiba, entered the infrastructure sector with an investment fund specially created for highway auctions.

Among the shareholders of 4UM FIP-IE I are influential names, such as the Malucelli, Salazar, Federmann and Backheuser families, owners of important construction and engineering companies.

For 4UM’s president, Leonardo Boguszewski, the company is confident in its ability to deliver what was promised. “We know the complexity of the challenge, but we are confident in our ability to execute,” he said.

According to the executive, the company intends to finance the project through a combination of equity and debt. So far, R$800 million has been raised for the first phase of the project, but the fund remains open for new funding.

Opportunities and uncertainties ahead

The other company that participated in the auction, Opportunity, which has been operating in the financial market for 30 years and has around R$60 billion in assets under management, did not win the concession.

Even with a discount of just 0,10%, the manager showed interest in exploring opportunities in the road sector, something unprecedented in its trajectory.

However, despite expectations, 4UM will face immense challenges. BR-381, in addition to being dangerous, requires complex and large-scale works, which will include duplication of sections, construction of viaducts and improvements in signage and paving.

With operations scheduled to begin in late 2024, the manager will need to prove that it can, in fact, transform the road and save lives, while facing the inevitable financial and operational adversities.

A future of hope or more of the same?

Although the concession of BR-381 lights a light at the end of the tunnel, it remains to be seen whether 4UM will be able to fulfill its promises.

The billion-dollar investment will certainly bring improvements, but the history of accidents and mismanagement of this highway haunts any optimistic forecast.

After all, will this 30-year contract be enough to transform the “Highway of Death” into a safe and modern road? Or will we just be postponing yet another failure? The future, as always, is uncertain.

Do you believe that BR-381 will finally be restored and become a safe highway, or do you think this project will face the same obstacles as previous attempts? Leave your opinion in the comments!

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Alisson Ficher

Journalist graduated in 2017 and working in the field since 2015, with six years of experience in print magazines and over 12 thousand online publications. Specialist in politics, jobs, economics, courses, among other topics. If you have any questions, want to report an error or suggest a topic on the topics covered on the site, please contact us by email: alisson.hficher@outlook.com. We do not accept resumes!

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