TCU: Prohibition On Interstate Passenger Transport In Brazil Revoked By ANTT

This Week Was the Perfect Time for the Federal Court of Accounts (TCU) to Lift the Ban on the Expansion of the Interstate Passenger Transportation System in Brazil by the National Land Transport Agency (ANTT).

In 2014, still under Dilma’s government, the Interstate Collective Passenger Transport System (TRIP) was modernized to democratize the provision of services through competition among carriers.

Twists and turns in interstate passenger transportation in Brazil. One of these twists – now a significant barrier for the sector – was the complaint from one of the traditional associations that initiated the process at the TCU in March 2021, under the potential offensive of an alleged violation within the ANTT. 

Regardless of whether the allegations are substantiated or not, a precautionary measure surprisingly weakened some of the regulator’s powers for nearly two years.

No factual circumstance can be speculated to justify such a prolonged ban. There is no urgency to resolve the case, although the indications of violation are significant enough to warrant aggressive action from the control agency. This backdrop lends credibility to the belief that the alleged violation is therefore remediable, nor does it justify the fact that the court has not taken the necessary corrective measures.

This lengthy 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 residents, in addition to a significant potential for price reduction due to competition.

Suspension of Interstate Passenger Transportation in Brazil Affects 1,300 Administrative Processes

Across the agency, this paralysis represents the suspension of over 1,300 administrative processes, the inoperability of more than 120,000 new potential markets, the inability of at least 140 new companies to operate under normal conditions, and the pending implementation of 198 new routes.

The regulatory system of TRIP has been notoriously unstable, at least since the 1988 constitution. Several legislative and regulatory changes have resulted in various dysfunctions, including legal insecurity, industry oligopolies, and the notorious harm to users with limited routes, leaving little choice but to live with potentially higher prices.

That is why, since 2020, the ANTT has been discussing a version of a new regulatory framework to modernize and consolidate the rules of TRIP. This new draft resolution underwent an intense and transparent process that included public hearings, requests for contributions from the community, the industry, and the ANTT itself, as well as analyses from the agency’s technical address and the Attorney General’s Office.

Therefore, now is the perfect time for the TCU to lift its ban and judge the merits of the process. In addition to the unsustainable move of blocking the regulators from granting the services they regulate, the agency has been preparing for nearly three years to implement an open regulatory system that would allow the entry of new actors and provide greater access to interstate highways that improve service delivery.