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October 27, 2016

Brazilian Highways Worse in 2016 Compared to 2015 Study Finds

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

In their 20th annual evaluation of the nation's highways, the National Transportation Confederation of Brazil (CNT) reported that 58% of Brazil's highways have some type of problem with either the pavement, signage, safety structures, etc. They evaluated 103,000 kilometers of highways including all the federal highways and the major state highways. Rural roads were not included in the study which was conducted from July 4 to August 2 of this year.

The study indicated that the pavement of 48% of the highways is rated as average to poor. Fifty one percent of the highways have a deficit in signage and 78% of the highways have problems with the geometry of the roadway - angles, slopes, etc.

CNT indicated that from 2015 to 2016, there was a 26% increase in critical deficits in the highway system. These critical deficits include such things as sections of the roadway with large potholes, lack of guardrails, unsafe bridges, severe erosion, crumbling safety barriers, etc. The number of critical deficits increased form 327 in 2015 to 414 in 2016.

CNT, which represents the transportation sector in Brazil, estimates that the poor condition of the nation's highways increases transportation costs by 25% due to slower speeds and increased maintenance costs. The poor condition of the highways not only slows the movement of goods such as grain, it also results is thousands of lost lives due to preventable accidents.

The president of CNT, Clesio Andrade, attributes the problems to a lack of federal investments in the nation's transportation system. In 2015, the federal investment in all forms of transportation equaled to 0.19% of Brazil's GDP. The federal government invested $ 5.95 billion in the nation's highways in 2015. That increased to R$ 6.55 billion during the first nine months of 2016, but it is still much below what is needed.

CNT estimates that Brazil needs to spend R$ 292 billion in highway widening, construction, and reconstruction just to eliminate the critical deficits in the system. In other words, Brazil needs to spend 45 to 50 times more than its annual expenditures just to resolve the critical issues.

The president of CNT stated that much more needs to be done both publically and privately to improve the nation's highway system. In order to increase funding, many of Brazil's main highways are being converted into toll roads in order to generate the needed funds for maintenance and improvements. Many in the agricultural community oppose these conversions because the reduced costs would benefit the transportation companies while the increased tolls would be passed along to the producers in the form of lower grain prices.