14 people die every day on Brazil’s roads. Is privatization the answer?

. Nov 09, 2019
brazilian roads Photo: Diogo Moreira/A2/FP

The list of priorities for Brazil’s Infrastructure Ministry is a long one. At the top, however, is its plan to privatize the country’s highways. While the main focus of this move is to reduce the size of the state and raise funds for the country’s strapped public accounts, the gains of bringing in private investors to manage Brazil’s roads could go beyond the financial, as improved infrastructure conditions could have helped avoid the loss of nearly 88,700 lives on federal roads in the past 12 years. 

</p> <div class="flourish-embed" data-src="visualisation/898689"></div><script src=""></script> <p>According to data gathered by the National Transport Confederation (CNT) in their <a href="">panel on road accidents</a>, Brazil registered 69,206 traffic collisions in 2018, of which 53,963 had casualties, leading to 5,269 deaths. Considering the past twelve years, the number is 64 smaller than the 2011 record of 192,322 occurrences, however, that is more connected to a change in the way the Federal Highway Police reports data than to any improvement in itself. Since 2015, <a href="">drivers are supposed to report accidents without victims</a>, which explains why this sort of occurrence dropped from 98,302 in 2014 to 15,243 four years later.&nbsp;&nbsp;</p> <div class="flourish-embed" data-src="visualisation/898677"></div><script src=""></script> <p>Per Jefferson Cristiano, CNT’s research and statistics coordinator, the shocking scenario is caused by a combination of factors, such as drivers’ recklessness, poor vehicle maintenance, lack of oversight and the bad conditions of Brazilian roads.&nbsp;</p> <p>“When you look at the federal roads system, more than 80 percent is comprised of single-track roads and the most common cause of accidents are collisions, so you must expect poor infrastructure plays a part in that,” he told <strong>The Brazilian Report.</strong>&nbsp;</p> <p>“Are people to blame for these accidents? In large part, yes. But when there’s a crack on the road and the driver has to deviate abruptly and a car crash happens, you must question what was registered on the police records when it says it was the driver’s fault,” he added.</p> <div class="flourish-embed" data-src="visualisation/897979"></div><script src=""></script> <div class="flourish-embed" data-src="visualisation/898006"></div><script src=""></script> <h2>Quality of roads: private v. public </h2> <p>As CNT’s research on Brazilian roads show, only 41 percent of Brazilian roads are considered in &#8220;good or excellent&#8221; condition. And the difference between the state of publicly and privately managed roads is alarming. The data shows that 73.7 percent of roads managed by the private sector are in good or excellent condition, while that number drops to 32.5 percent for public roadways. Unsurprisingly, the ten best roads in the CNT study are privately managed, while the bottom ten are public.&nbsp;&nbsp;</p> <p>This discrepancy is down to the level of investment, as highway operators are contractually obliged to invest and maintain the roads under their control. However, the <em>speed</em> of maintenance is also key: it takes longer for the government to be able to repair even small damages due to the bureaucracy of the public sector, making the problem worse and harder to solve, according to Mr. Cristiano.&nbsp;</p> <div class="flourish-embed" data-src="visualisation/810934"></div><script src=""></script> <p>The losses reach catastrophic proportions. 2018’s crashes generated a cost of BRL 9.73 billion to Brazil, taking into account medical expenses, loss of cargo and vehicles, and the loss of productivity caused by the death of workers—many of them still young. And this could be avoided not only with better road conditions but also with more simple measures, says Mr. Cristiano.&nbsp;</p> <p>“Depending on the infrastructure, the chances of fatal crashes increase a lot. For example, when you don’t have proper signals before a dangerous curve, fatal crashes are twice as likely.”</p> <h2>Plans </h2> <p>Roadways are one of the highlights of the federal government&#8217;s Partnership for Investments Program (PPI), created in 2016 by former president Michel Temer and maintained by the Jair Bolsonaro administration. However, road concessions have been far less successful than <a href="">airport auctions,</a> for example. While five airport projects have been sold off, only one road has been handed over to the private sector, and the contract has yet to be finalized.&nbsp;</p> <p>According to the PPI’s website, there are 17 other ongoing projects to sell off highway concessions in Brazil but only two are in northeastern states—Bahia and Maranhão—despite the region having the highest death toll per accident.</p> <p>These roads, however, could be the next in line to join the program, as a presidential decree issued in August ordered studies to include 4,114.7 kilometers of road in southern Paraná state and 7,213 km around the country, divided into 15 batches—7 of which are in the Northeast.&nbsp;</p> <div class="flourish-embed" data-src="visualisation/897949"></div><script src=""></script> <h2>Changes in the law</h2> <p>Earlier this year, President Jair Bolsonaro personally delivered a bill to Congress to change Brazil’s traffic laws. Among the proposals were to double the number of points needed for a driver to lose his/her permit and increasing the validity of drivers&#8217; licenses from five to ten years. One of the most controversial points was <a href="">eliminating fines for drivers who transport children without proper booster seats</a>, which sparked criticism even among liberal lawmakers.&nbsp;&nbsp;</p> <p>As we explained in our <a href="">June 8 story</a>, the World Health Organization estimates that the use of car seats reduces the risk of child deaths in traffic accidents by up to 60 percent. Not to mention that when the points system was introduced in Brazil—along with the rest of the current traffic code—the number of deaths in traffic fell by over 20 percent in two years.</p> <p>For Mr. Cristiano, it is too soon to say whether these measures would make Brazilian roads any less safe. However, he believes that the update would be more effective to protect drivers and passengers if it focused on education instead of deregulation.&nbsp;</p> <p>“Brazilian drivers&#8217; training should be reviewed. It doesn’t prepare the driver for the road as most classes happen in city streets. So they don’t know how to react in situations such as overtaking a truck, which may lead to accidents. When drivers have better training, safety becomes cultural,” he said. 

Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Most recently, she worked as an Editor for Trading News, the information division from the TradersClub investor community.

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