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This week was the perfect time for the Federal Court of Auditors (TCU) to revoke the ban on the expansion of Brazil's interstate passenger transport system by the National Land Transport Agency (ANTT).
In 2014, still in the Dilma government, the Interstate System of Collective Passenger Transport (TRIP) was modernized to democratize the provision of services through competition between carriers.
Turnarounds in interstate passenger transport in Brazil. One of these twists – today a major obstacle for the sector – was the complaint by one of the traditional associations that filed the lawsuit with the TCU, in March 2021, under the offensive potential of the alleged violation within the scope of the ANTT.
Regardless of whether the allegations were substantiated or not, an injunction surprisingly weakened some of the regulator's powers for nearly two years.
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No factual circumstances can be speculated to justify such a lengthy ban. There is no urgency to resolve the case, although the evidence of violation is significant enough to justify aggressive action by the control body. This background lends credence to the belief that the alleged violation is therefore remedial, nor does it justify the fact that the court failed to take the necessary corrective measures.
This time-consuming process is charged to the user. At least 468 cities could be included in the TRIP system, representing a potential increase of 21% over the current network, affecting 14,7 million inhabitants, in addition to significant potential for price reductions due to competition.
Suspension of interstate passenger transport in Brazil affects 1300 administrative processes
Throughout the agency, this stoppage represents the suspension of more than 1.300 administrative processes, the inoperability of more than 120.000 new potential markets, the inability of at least 140 new companies to operate in the normal regime and the pending implementation of 198 new lines.
TRIP's regulatory system is notoriously unstable, at least since the 1988 constitution. Various legislative and regulatory changes have resulted in a number of dysfunctions, including legal uncertainty, industry oligopolies and the notorious harm to users with limited routes, leaving little choice but to live with potentially lower prices.
That's why, since 2020, the ANTT discusses a version of a new regulatory framework to modernize and consolidate TRIP rules. This new resolution draft went through an intense and transparent process that included public hearings, requests for contributions from the community, industry and ANTT itself, in addition to analyzes of the technical address of the agency and the Attorney General's Office.
So now is the perfect time to TCU withdraw its ban and adjudicate on the merits of the case. In addition to the unsustainable movement to bar regulators from granting the services it regulates, the agency has been preparing for almost three years to implement an open regulatory system that would allow the entry of new actors and provide more access to interstate highways that improve the provision of services.
