Por – Luis Bulcao Pinheiro
L O Baptista Advogados has added a new partner to boost its administrative law practice, predicting a rebound in infrastructure investment driven by Brazil’s next government.
Alberto Sanz Sogayar, 49, joined on 10 October taking the 46-lawyer firm’s partner count to 20. Sogayar has experience working for legal departments in some of the biggest construction companies in Brazil. Most recently, he worked in-house for toll road concessionaire Rodovia dos Tamoios following time as a general counsel for the engineering and construction department at Odebrecht. Sogayar also worked for construction company Queiroz Galvão.
Sogayar’s arrival bolsters the infrastructure department, which is led by partner Fernando Marcondes. He’s betting on better times for the sector in 2019. “It is true expectations of a revitalised infrastructure sector have been high for a long time, but now the driving factor is a new government will be in place in January,” says Marcondes, who spoke to Latin Lawyer before yesterday’s election. He added that regardless of who won, it would end a period of uncertainty which has hit the sector particularly hard.
Marcondes lists concession auctions and the resumption of big construction projects that were mothballed during Brazil’s economic crisis as new sources of work.
L O Baptista expects China will be a big player in these investments. The firm recently hired a lawyer in Beijing to capitalise on this potential.
Brazil’s infrastructure deficit is notorious given the size and dynamism of its economy. The country’s infrastructure capabilities place it 81 out of the 140 countries listed in the World Economic Forum’s Competitiveness Report 2018. This is two places lower than 2017 and behind other major economies in the region like Chile (41st), Mexico (49th) and Argentina (68th).
Recent Brazilian governments have tried different ways to close the country’s infrastructure gap. Brazil’s national development bank BNDES led efforts under Luiz Inácio Lula da Silva (2003-2010) and during the first term of Dilma Rouseff (2011-2014), but took a backseat after economic boom turned to bust and Brazil’s fiscal deficit grew. The role of the public sector was then reduced by President Michel Temer, who pushed for private investment to plug the gap. His government tried to do this through the introduction of new public private partnership regulations and privatisation initiatives.
Recent auctions involving ports, airports and electricity projects have demonstrated the industry’s potential. It’s also kept many law firms busy. Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados, Stocche Forbes Advogados and Wald, Antunes, Vita, Longo e Blattner Advogados advised a consortium in CESP’s privatisation this month. Cescon, Barrieu, Flesch & Barreto Advogados has also been active, steering an Eletrobras auction for wind projects and transmission lines in September. That same month, Machado Meyer Advogados helped Indian investors acquire transmission lines concessions in an auction held by the electricity regulator Aneel.
Agência Brazil reported on 1 October Temer was still pushing for airport, railway and road auctions before the end of his term on 31 December. However, all eyes now turn to Jair Bolsonaro following his election yesterday. It is not clear yet what direction the future president will take. While his economic advisor, Paulo Guedes, has drawn up plans for a comprehensive privatisation programme that has earned approval from investors, Bolsonaro’s own views and those of many in his inner circle have favoured state-led development in the past. Yet, many are betting that whatever direction the new government takes, Brazil’s infrastructure deficit will still offer a path to growth.
L O Baptista is not the only firm preparing for the return of largescale infrastructure investment. Demarest boosted its practice with a hire in August. At the time, the firm’s CEO Paulo Coelho da Rocha said infrastructure development would remain a long-term government priority. Felsberg Advogados also hired two infrastructure partners at the beginning of the year; one in March and one in January. Elsewhere, Lobo de Rizzo strengthened its infrastructure team with a lateral hire in January.