6/1/2020
The coronavirus pandemic has been causing strong impacts on the most diverse sectors of the economy, including the infrastructure one. From the drastic drop in the number of passengers at airports and public transport to the decrease in energy consumption, the situation is unprecedented and has consequences.
Several measures have been discussed in order to minimize losses, such as the restoration of the economic and financial balance of concession contracts. Such a situation is feasible before the pandemic is framed, as a strong or major case.
In order to facilitate the procedure for economic and financial rebalancing of administrative contracts, Deputy Arnaldo Jardim (Cidadania-SP) suggested on May 5 the creation of:
- A protocol to establish criteria, standards for analysis of impacts and procedures and deadlines for this analysis; and
- New “chambers” with members of agencies, courts and other competent bodies to discuss requests for rebalancing.
As is known, even though the Attorney General’s Office (AGU) and the Ministry of Infrastructure already recognized that the pandemic is classifiable as a force majeure event for the purpose of rebalancing, the cases must be analyzed individually, proving the imbalance of contracts. Therefore, tools like these can bring some benefits.
The protocols have as main objective to guide the actions in Concessions and PPPs in the context of COVID-19. For this, there is a list of actions:
- The creation of a tool that identifies, classifies, qualifies and quantifies the costs incurred for the public and private sectors;
- The establishment of a processing and approval procedure, with deadlines and designation of those responsible for making decisions about rebalancing;
- The establishment of collaborative structures between public managers and control bodies to ensure speed, transparency and legal security for public and private actors, avoiding interruptions in operations and reducing judicial proceedings; and
- The establishment of standards for measuring and monitoring impacts in order to align incentives between the public and private sectors in contracts with the public administration.
It was also suggested the creation of a technical instance with the purpose of supporting the processes of rebalancing of Contracts, through the participation of all the necessary administrative bodies, conducted by the Regulatory Agencies, operating for a limited time. It is also expected to speed up the analysis of new concession projects for the resumption of investments.
Such measures can positively impact the infrastructure sector, allowing more investments.
Our Infrastructure team is prepared to assist clients within this new scenario.
