Pressured by investors, the government agreed to set up a more robust guarantee structure for railway construction financing, taking the so-called “Valec risk” off the radar. Instead of passing through the state-owned company, the securities passed on by the Treasury as guarantee for the undertakings will be managed directly by a bank. The financial institution will function as a trustee.
Valec, which is responsible for acquiring all of the railways' transport capacity, will own the R$15 billion in securities that the Treasury will provide to the state-owned company as collateral, but the ownership and management of the securities will be up to the financial institution. It will be a kind of “pledge” operation, according to a government source. An operation in which the bank will be hired to take care of the securities given as collateral is being designed.
The proposed structure of guarantees was created by the Ministry of Finance and presented to representatives of construction companies. The assessment of the companies is that the solution is not ideal, but it is the best that can be found at the moment.
Companies interested in building railroads faced a major problem. The banks were not accepting, as guarantee of financing, the revenues that they would have with the concession. This model, called project finance, was used on highways.
Doubts. But, in the case of railroads, the banks' view is different because, according to the fixed model, the operating revenue of the concessionaires will come from Valec. And the market has doubts whether the company will have the necessary contributions over the 30-year duration of the concession contract. This is the so-called “Valec risk”.
Not even the government's decision to allocate R$15 billion in Treasury bonds to Valec was enough to provide financial institutions with security. Thus, the solution found was to deliver the titles to be managed by a fiduciary agent.
“This model gives more robustness to the guarantees and confidence to investors, since the bank will be responsible for transferring the guarantees”, said the source.
This, however, does not guarantee that the concessions will take off. Now, the two sides are fighting over investment estimates and, consequently, the profitability of the first line to be auctioned – between Lucas do Rio Verde (MT) and Campinorte (GO).
Investments. Originally, the investment forecast was R$ 6,3 billion, according to the National Land Transport Agency (ANTT). At the end of last year, the Federal Court of Accounts (TCU) redid the accounts and fixed the value at R$ 4,3 billion. The builders say they were not consulted by ANTT about the value. Thus, they cannot rely on the amount fixed in the notice.
A government source admits that the reduction imposed by the TCU leaves the builders' margin “very fair”. The Ministry of Transport itself argued in the court of accounts and, in February, won a partial victory. The TCU decided not to impose the R$4,3 billion. He left the value to be defined by the government, but will analyze it once decided. Companies want a higher investment estimate, as this gives them a more comfortable margin to operate, in addition to ensuring greater profitability.
Source: The State of S. Paulo
