6th
Edition
Collection of essays on
development and
investment opportunities in
Brazil
Coordinator: Lawyer Su Jung Ko
Support: Bom dia News, and Journalist Edmundo Ubiratan

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LIST OF CONTRIBUTORS WITH WRITING
See below the list of all the collaborators who contributed or
will contribute with the writing for the Collection of Essays.
New collaborators will be included from time to time.
1-. Su Jung Ko
Su Jung Ko graduated from Law School of the University of São Paulo,
Brazil, and obtained post graduation degree in corporate law from
Getúlio Vargas Law School. She also obtained LL.M from Georgetown
Law Center in Washington D.C.. After 10 years of experience as a
corporate lawyer at a large Brazilian law firm, Su founded Golden
Hawk Consulting, a consulting firm specialized in merger & acquisition.
Su is deeply engaged in promoting leadership among youth within the
Korean-Brazilian community. She also served as president of the
Brazil branch of the Network of Future Korean Leaders and counsel of
the Corporate Division of the General Consulate of Republic of Korea
in Sao Paulo, Brazil. Su offers workshops to Korean Brazilians on
career and cultural identity with the support from the Korean
companies and several entities of the Korean community in Brazil.
Her engagement with the community leadership made her the winner
of the future leader awarded by the Chambers & Partners Latin
America Women in Law 2015.
2-. Edmundo Ubiratan
Edmundo Ubiratan is a journalist specialized in aviation and airlines.
He was editor-in-chief of the online portal AIR and international
correspondent for the British group Key Publishing. Edmundo has
worked on several projects with the Brazilian and other militaries,
including Brazil, USA, Argentina and United Kingdom. He has covered
major aviation events such as the International Paris Air Show, EAA
Air Venture, LABACE, Farnborough International Airshow, Sun'n Fun,
Moscow Air Show, Dubai Air Show, EBACE, among others. He has
also joined special missions such as the United Nations Stabilization
Mission in Haiti and the Brazilian Antarctic Program. Since 2008,
Edmundo has been working at Aero Magazine, the largest Brazilian
magazine specialized in aviation.
3-. Beatriz Camasmie Curiati Salione
Beatriz Camasmie Curiati Salione is technical assistant of the public
attorney of Audit Court of the State of São Paulo. Beatriz has master
degree in administrative law by Law School of the University of São

3
Paulo. She was enrolled with the Brazilian Bar Association after she
graduated from the Law School of the University of São Paulo. She
also holds undergraduate degree in business administrations by
Business School Fundação Getúlio Vargas.
4-. Sheila C. Neder Cerezetti
Sheila C. Neder Cerezetti is a lawyer and a Professor of Commercial
Law at the University of São Paulo Law School. She was a
postdoctoral fellow at the European University Institute (Italy) and
she conducts research at the Max-Planck Institute für auslandisches
und internationales Privatrecht (Germany), with a grant from the
Alexander von Humboldt Foundation.
5-. Fabio Florence de Barros
Fabio Florence de Barros is a lawyer from USP (University of São
Paulo) and PUC-Campinas (Pontifical Catholic University of Campinas).
Fabio obtained bachelor and master degree in philosophy from
UNICAMP (University of Campinas). He currently teaches philosophy
in private high school. Currently, he is doing Ph.D in philosophy at
PUC-São Paulo and teaches philosophy and sociology in high schools.
6-. Roberto Kanitz
Mr. Kanitz is the founding and managing partner of Uno Trade
Strategy Advisors (www.unotrade.com), a network of
multidisciplinary consultants (economists, lawyers, company
administrators and professionals in international relations) that
specialize in international trade matters (commercial defense,
antidumping, technical barriers to sanitary and trade) and in assisting
companies that want to access the Brazilian market or Brazilian
companies that want to access the foreign market. Academically, Mr.
Kanitz majored in law from Sao Paulo University and studied law at
Georgetown Law Center. Mr. Kanitz also published in London the
book “Managing Multilateral Agreement: the Role of the WTO
Chairman" (Editora Cameron May).
7-. Eder Brito
Eder Brito obtained Master degree in Public Administration from
Korea University (South Korea, 2012). Eder is specialist in
Organizational Communications from FIAM-FAAM (2010) and majored
in journalism from the Methodist University of São Paulo (2005).

4
Currently Eder is communication advisor to the Municipal Stadium
Paulo Machado de Carvalho – Pacaembu. He coordinates programs of
training in public management and political formation in NGO Oficinal
Municipal, entity partner of the Konrad Adenauer Foundation
(Germany) and Itaú Social Foundation. Eder also is Professor of
Public Management of Municipal FACCAMP - Campo Limpo Paulista
Colleges and serves as weekly contributor of the blog Humberto
Dantas, column in Portal Estadão.com that focuses on municipal
policies.
8-. Marcelo Donnabella Bastos Elias
Marcelo Donnabella Bastos Elias is a lawyer who graduated from Law
School from University of Sao Paulo, Brazil. He did post graduation
courses in Public Law at Complexo Juridico Damasio de Jesus and in
Labor Law and Labor Procedure at Mackenzie University. Marcelo has
a solid career in the business environment, with experience as a
corporate lawyer in a large law firm and as an in-house counsel in a
large Brazilian corporation in the construction field. He worked as
Legal Manager of Latin America in a Swedish multinational company
in agribusiness field and currently he is doing LL.M. (Master of Laws)
in International Commercial Law at University of California in Davis,
CA, USA.
9-. Roberta Okura
Roberta has an MA in Art Business (Sotheby's Institute of Art,
London), a Diploma in Art History (Fundação Armando Á lvares
Penteado, São Paulo), and specializes in contemporary art. She has
two years of international experience working as an associate advisor
and as the leading expert for the Brazilian art market for London-
based, Alpha Art Advisory. She now works in São Paulo as an advisor
on Brazilian and Latin American contemporary art. Roberta also holds
a Master’s degree in Statistics (Universidade de São Paulo, São Paulo)
and has worked with econometrics and business intelligence within
large financial institutions in São Paulo.
10-. Gabriel Prado de Barros
Gabriel Prado de Barros is an entrepreneur, marketing expert and
came from a family of ranchers. He holds a Master’s Degree in
International Business from Hult International Business School in SF,
Boston and NYC (World’s most international business School, TOP 10
FT ranking), a Postgraduate in Applied Consumer Sciences from ESPM

5
(Brazil’s top university in marketing), and has taken supplementary
courses in Communication Planning and Marketing from the Miami Ad
School. His experience includes projects at multiple startups with a
wide-ranging industry focus including car sharing, health insurance,
technology and agribusiness. He currently serves as Director of
Business Development for KGN Consulting Company focusing on
Brazilian agribusiness investment.
11-. Yiming Zeng
Yiming Zeng served as a credit analyst covering Latin America’s
sovereigns and financial institutions at a leading Japanese bank in
New York. Among his primary focuses was evaluating the country risk
for investing in Latin America, including Brazil, with regard to the
region’s political, macroeconomic, financial, and security
developments. Academically, Yiming graduated with a double major
in mathematics and philosophy from Wesleyan University, United
States, with focus on modern European philosophy. His writings on
liberal arts education have been published on multiple top
newspapers and widely circulated on social media in China. Currently
he is doing MBA at Oxford University, United Kingdom, and he will
join Citi's Investment Banking in Hong Kong post graduation.
12-. Marlon Shigueru
Marlon Shigueru Ushiro Ieiri graduated from Law School at
Universidade Estadual de Londrina (State of Parana, Brazil). Marlon
obtained a Master degree in European Union Law at Universidad
Carlos III de Madrid, Spain; a Master II degree in International Trade
Law at Université Paris X, France; and course in Infrastructure
Contracts at Fundação Getulio Vargas – SP. Practice in the
engineering, construction and infrastructure area, representing
national and international clients in public and private projects. He is
founder member of the Brazilian Institute of Construction Law (IBDiC);
member of the Society of Construction Law (UK); member of the
Young Entrepreneurs Committee – CJE Construção of the Federation
of Industries of the State of São Paulo (FIESP).
13-. Paula Un Mi Kim
Paula was born and raised in Sao Paulo. She graduated in
Audiovisuals at the University of Sao Paulo, where she specialized in
screenplay and cinematography. At age 17 she was awarded with the
audience prize at the Festival Mundial do Minuto with the animated

6
short "Explicit Sex". In 2007, she was approved in the MFA program
at K-Arts (Korea National University of Arts) in South Korea, where
she directed "Chu Mar", "26 Best Korean Girl" and "Gonnyon's First
Drive". The first two shorts screened in renowned festivals, such as
PalmSprings, Expresion en Corto, Festroia, Asian American
International Film Festival, among others. In 2010 she founded Sam
Ka Pur Filmes (www.samkapurfilmes.com). Now she is financing her
debut feature, "Butterfly Diaries", finalist at BoliviaLab, selected to
receive the Development Fund from São Paulo Film Commission,
contemplated by the Sao Paulo Film Fund in 2014 and the first
Brazilian project to participate at the Cinefondation´s Atelier (Cannes
Festival) in 2015.
14-. Carolina Malhado
Carolina Malhado has a law degree from Pontificia Universidade
Catolica (Sao Paulo, Brazil) and a LLM from Georgetown University.
She worked at Pinheiro Neto Advogados, a leading law firm in Brazil,
from 2008 to 2013. Carolina did a summer internship at the US
House of Representatives in 2014, working for Congresswoman Lois
Frankel. She was also intern for Honorable Judge Peter Messitte (US
District Court of Maryland). Carolina joined Concurrences Review in
2015, as a US Associate Editor. She also created a blog in 2015 called
Arts Commented, where she writes about movies, plays and TV
shows both in English and in Portuguese.
15-. Caroline Taglietti
Caroline Taglietti é graduada em Relações Internacionais pela
Universidade do Vale do Itajaí-UNIVALI, Santa Catarina, Brasil, e
atualmente trabalha com Supply Chain na Prozyn BioSolutions,
empresa especializada em formular ingredientes mais “Bio” para
Bebidas e Alimentos. Caroline está envolvida, principalmente, na
importação e exportação de alimentos do Brasil, com interesse em
tendências de mercado relacionadas a commodities, atacadistas e
varejistas.
16-. Peter Eccles
Mr. Eccles, a New York lawyer and member of the Foley & Lardner
LLP’s Private Equity and Venture Capital practice, has spent much of
his career advising clients on cross-border transactions involving
Brazil, where he lived as a youth. He has worked as both outside and
in-house counsel to U.S. and international clients on a wide range of
issues involving investments in emerging markets throughout Latin

7
America, Asia and Africa. He also advises non-U.S. clients on their
investments in the United States and in other jurisdictions. His
practice focuses principally on mergers and acquisitions, private
equity and venture capital, joint ventures and other corporate and
commercial arrangements. Mr. Eccles also has extensive experience
representing Brazilian issuers raising capital in the global credit and
equity markets, and has expertise in complex multi-jurisdictional
securitization, project finance, and private equity transactions. Mr.
Eccles brings more than 20 years of experience working at two large
international law firms and as associate general counsel of a major
credit rating agency. He is a member of the New York Bar and has
served on the Inter-American Committee of the Bar Association of the
City of New York, of which he is a member. He has also served as a
member of the Corporate Governance Sub-Committee of the
American Bar Association. Mr. Eccles graduated magna cum laude
from Harvard College (A.B., 1985) and received his law degree from
Harvard Law School (J.D., 1989).
17-. Rebecca Maduro
Rebecca Maduro, a lawyer graduated from the University of Taubaté
– SP, Brazil. She attended graduate in Contract Law, extension
studies in Financial Markets and Banking Contracts at GV Law, course
Structured Finance by Saint Paul School of Business / New York
Institute of Finance, extension studies in Energy Law by the Brazilian
Institute of Studies of Energy Law - IBDE. For 8 years operating in
the Brazilian energy market, working in multinational energy
companies in distribution and power generation. Currently, Rebecca
holds regulatory specialist position in the electricity group AES Brazil,
a subsidiary of AES Corporation group, major player in the energy
market in the world. She is also taking a Master in Business
Administration in the electricity sector by the Getulio Vargas
Foundation – 2017.
18-. André Maruch
André Maruch is a lawyer in São Paulo at Rayes & Fagundes
Advogados Associados. His practice focuses on corporate law,
mergers and acquisitions, foreign investment, and contracts. He
graduated from the Catholic University of Minas Gerais (PUC/MG),
holding a Maters of Private Law from the same institution. He was a
co-founder and coordinator of the Corporate Law Committee at the
Bar Association of the State of Minas Gerais (OAB/MG).
19-. Ricardo Medina

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Ricardo represents national and international clients in major
operations involving infrastructure, industries and real estate
buildings, legal management of construction contracts,
negotiation and dispute resolution. Ricardo also participates in
structured operations for financing real estate enterprises. Master in
International Law at the University of São Paulo, post-graduated in
Corporate Management and Business at Dámasio de Jesus Law
School, Bachelor of Law (LLB) at the University of São Paulo. Author
of the book Arbitragem e Administração – Brasil, Argentina, Paraguai
e Uruguai. Coordinator and coauthor of the book A Nova Lei da
Arbitragem Brasileira. Professor of Arbitration, Coordinator-Professor
of Construction and Infrastructure Law at CEU/IICS and Civil Law LLM
Professor. Nominated as one of the best lawyers in Brazil by Who's
Who Legal in Construction. Founder and Director of the Brazilian
Institute of Construction Law (IBDiC). Vice-president of the
Construction Law Committee of the Brazilian Bar Association
(OAB/SP). Counselor and Arbitrator of the Engineering Institute's
Arbitration and Mediation Center. Arbitrator at the Eurochambers and
the Centro de Análisis y Resolución de Conflictos de Peru. Member of
the Brazilian Arbitration Committee (CBAr).
20-. Orlando F. Dalcin
Lawyer specialized in tax law, with 10 years of experience in
prestigious law firms and consultancy companies. Experience in: Tax
Consultancy, with focus in Indirect Taxation. Experienced team leader
in broad sort of projects. Preparation of diagnostics focused on tax
efficiency internal controls and diagnosis and implementation of
projects and review of tax feasibility of setting up companies and / or
branches in various regions of Brazil. Orlando brings background in
transfer pricing, customs and international tax and corporate tax.
Orlando also has experience in support to ERP implementation and
customization, draft of business requirements and fit gaps, draft of
reports, memorandums and legal opinions on various tax subjects.
Orlando carries analysis of accounting and tax status of corporations
aiming to optimize tax efficiency, tax planning and succession. He
also has experience in administrative and judicial litigation, at federal,
state and municipal level and in due diligence and structuring of M&A.
21-. Jung-Eun (Jennifer) Choi
Attorney licensed in Korea and California (USA). She is a partner at
Korean law firm Daeryook & Aju LLC (DRAJU), specialized in
Corporate Law, Intellectual Property and International Transaction.
She graduated from Seoul National University (BS), and obtained
LL.M. from Georgetown University Law Center.

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22-. Caio Yoshikawa
Caio Yoshikawa is associate of PGLaw, São Paulo, Brazil. His practice
is focused on Corporate law, Commercial Contracts, and Banking and
Finance areas. He holds a Bachelor of Laws’ degree from the
University of São Paulo, Faculty of Law, and is LL.M candidate at the
same university. He is also a coordinator of the Center of Legal Asian
Studies at the University of São Paulo, Faculty of Law.

10
Financing to Infrastructure in Brazil
Caio Yoshikawa
Brazil is a country with more than 200 million of population and an
area of 8.5 million square km. In view of this, Brazil is the 5th
country
of the world with regards to area and population. The Brazilian
infrastructure is still very precarious despite the modern and
diversified agribusiness, and relevant mining and industrial sectors.
The huge territorial extension and distribution of population are some
of the factors that contribute to the hardships of Brazilian
infrastructure. Nonetheless, infrastructure investments related to
expansion, maintenance and modernization are essential for the
growth and development of the country.
The Brazilian Association of Base Industry (ABDIB) estimates that the
annual spending necessary to meet the infrastructure needs of the
Brazilian economy is about R$ 300 billion, equivalent to 5% of the
Brazilian GDP. In 2015, the amounts invested in the infrastructure
sector corresponded to 2.1% of the Brazilian GDP, about R$ 130
billion.
In view of this, there is still a big opportunity for international
investors when it comes about the infrastructure sector in Brazil. We
can highlight some markets such as ports, airports, highways,
railways, energy and telecommunications. As discussed along this
article, the Brazilian Government has been making efforts in the last
years to attract foreign investments. In September last year, the
Investment Partnership Plan (Plano de Parceria de Investimentos –
PPI) was released. PPI aims to make the becoming more attractive
the concessions’ model and promises more regulatory stability and
legal certainty.
The logic of financing of infrastructure in Brazil was historically based
on the substantial funding by the State through the Bank of Social
and Economic Development (Banco de Desenvolvimento Econômico e
Social - BNDES), a state-owned bank incorporated in 1952 for the
supply of the long-term credit. However, the Brazilian Government
has been searching alternatives for the financing of infrastructure
with a greater share of private investments. The main reason is the
current budgetary crisis that requires the adjustment of public
accounts and reduction of spending.
The Law No. 12,431 was enacted in 2011 to foster the long-term
financing in Brazil. This law provides that income tax rate is zero for
foreign investors regarding interests on securities issued upon public
offerings as of January 1st
, 2011 by companies which are not financial
institutions. As a practical matter, even investments in bonds

11
(debentures) with senior priority rank of payments compared to
shares may be benefited by this zero income tax rate.
The requirements for the zero income tax rate securities are the
following: (i) weighed averaged maturity shall exceed 4 years; (ii)
repurchase by the issuer or its related party shall be forbidden within
the 2 years as of the issuance; (iii) early liquidation upon redemption
or prepayment is forbidden, unless regulation by the National
Monetary Council (CMN) provides otherwise; (iv) no commitment
undertaken by the purchaser to resell the security; (iv) the payment
of returns shall be made at least a 180 days-basis; (v) evidence that
the security is registered with a register system authorized by the
Central Bank of Brazil or by the Brazilian Securities and Exchange
Commission (CVM); and (vi) commitment to allocate the raised funds
in the future payment or reimbursement of expenses, charges or
debts related to the projects of investment, including research,
development and innovation.
The major worries of foreign investors related to the long term
investments in Brazil are basically 3: (i) legal certainty; (ii) foreign
exchange rate exposures; and (iii) interest rates of the Brazilian
government bonds, which currently are more attractive than long-
term investment in infrastructure.
In the first case, the Brazilian government has been analyzing several
measures to modify the legal and regulatory framework in order to
reduce uncertainties for the investors. For example, they include
arbitration provisions in contracts of public-private partnerships and
concession, which may accelerate the dispute resolution. Other
measure is the extension in advance of the contractual terms of
partnerships.
With regards to risk of exposure to foreign exchange rate, despite the
global crisis and failing prices of commodities, much can be owed to
the economic and political juncture of Brazil in the last years. This
may undermine not only the returns of the infrastructure projects,
but also the projections and financial planning by the investors. The
infrastructure projects often have a long maturity term. Their
revenues are in Brazilian currency (R$) and the contracting of hedge
with big banks is expensive. Therefore, the Brazilian government is
carrying out some studies to reduce that exposure of the foreign
investors.
One of the models under analysis provides the sharing of demand risk
between the government and the investor. In this case, the
government pays a fixed amount to the concessionaire for the
availability of the infrastructure conceded. At the same time, the
government charges the concessionaire an amount that varies
according to the demand. The foreign exchange risk would be

12
reduced due to the fact that one or another payment is tied to the
foreign exchange rate. In this case, part of the cash flows of the
concessionaire would be expressed in Dollars of the United States of
America and not in Brazilian Reais. This mechanism was built to allow
even the foreign investor to bear initial investments of the concession
upon borrowing in a foreign currency.
The third concern of the foreign investors is the returns. They must
explain the fund providers why they decided to make the investments
in infrastructure in Brazil with a high risk and extended term of
maturity when, at the same time, the Brazilian government bonds
have low risk and high yields.
In this case, the stabilization of the public finances and recovery of
the growth are necessary for the reduction of the interest rates on
government bonds of Brazil. The result is a more attractive return
rate for foreign investments in the infrastructure sector, necessary for
the development of Brazil.

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Logistics - a nation's sustainable economic growth factor
Gabriel Prado de Barros
Brazil is the size of a continent that faces one of its biggest obstacles
to economic growth - poor logistics. Without efficient and effective
infrastructure, no country can sustain its economic growth. The
importance of infrastructure cannot be underestimated as it
integrates the country to the world, preventing waste and raises
competitiveness to the international markets.
Currently, Brazil is in a prominent position among the largest
exporters in the world, and is only prevented from performing even
better by its lack of transport networks. Thus, the greatest limitation
is the lack of quality and the variety of transport modes. The country
has very poor transport links, particularly with respect to railways,
roads and waterways.
The Dom Cabral Foundation (Fundação Dom Cabral) published a
study showing that logistic inefficiency consumes 12% of the Brazilian
GDP, which represents a loss of US$ 83.2 billion per year. In the
United States, this cost represents only 8%.
One of the reasons for the lack of Brazilian corporative
competitiveness in the global markets is the high cost of doing
business, the so-called “Brazil Cost” (Custo Brasil). This cost is
generated by a complicated tax code, poor infrastructure and the
suffocating bureaucracy.
According to the same study, as for the cost of exporting a single
container, including documents preparation, transportation and other
activities, Brazil ranks poorly when compared to other developing
countries.
Container export cost per country:
• Singapore: US$ 456
• China: US$ 500
• India: US$ 1,055
• Brazil: US$ 1,790
Due to these chronic transportation issues, Brazil has been losing
competitiveness, with problems ranging from cargo thefts,
operational inefficiencies and the inadequate use of transport modes.
Today, despite the enormous potential of waterways, the country is
largely dependent on road transportation, due to the low price of

14
freight and low investment in alternative transport modes. According
to the Transport Ministry (Ministério dos Transportes), almost 60% of
domestic cargo is transported by highways.
The road network is more highly used than other options, such as
waterways, railways or air transport. Compared to other countries,
especially the United States, because of the size of the country, Brazil
uses the highways as its the main mode whereas the USA makes
greater use of its waterway system.
It is important to highlight that 57.3% of Brazilian roads are seriously
degraded according to the CNT (National Confederation of Transport),
which increases the costs significantly affecting competitiveness. In
other words, there are many complaints about the poor conditions of
the highways as being the aspect that contributes to the cost of
logistics.

15
Source: Centrogrãos, Caramuru and Soy Transport Coalition, BCR
Rosário
To illustrate this, according to a survey by IMEA 2013 (Instituto
Matogrossense de Economia Agropecuária / Mato Grosso Institute of
Agricultural Economics), when compared the logistic cost of
transporting grain from the main producing centers in Brazil,
Argentina and USA to China, Brazil has the highest cost per ton.
The soybean from Sorriso, Mato Grosso, Brazil's largest grain
production city, to China is US$ 145 per ton, and US$ 100 of this cost
is due to road transportation. When compared to the USA, the total
cost of shipping this grain from Illinois to China is US$ 71 per ton,
and the cost from farm to New Orleans port is only $18 per ton.

16
Source: ANTAQ - Agência Nacional de Transportes Aquaviários -
National Waterway Transportation Agency
According to ANTAQ (Agência Nacional de Transportes Aquaviários /
National Waterway Transportation Agency), Brazil has 44,000 km of
waterways to be explored for transportation, but only 13,000 km of
this system are currently used.
Thus, some companies are investing in the waterways to reduce
transportation costs of commodities such as soybean and corn from
the northern part of Mato Grosso State. This is the case of the
Companhia Norte de Navegação e Portos (Cianport), which is an
enterprise built by two companies from Mato Grosso - Fiagril (Lucas
do Rio Verde) and Agrosoja (Sorriso). This port has a complete and
sustainable structure composed of reception, analysis station, scales,
tippers, cargo lifts, bulk storage silos for 55 thousand tons, conveyors
and a floating terminal with the capacity of moving up to three million
tons of grain per year.
This new mode will contribute to the reduction of logistic costs, by
reducing the road distance to the port by 1,100 kilometers.
Another major logistic problem the country faces is the technological
lag, which entails, among other things, the reduction of the cargo

17
tracking indicators, making the system integration very difficult and
making demand forecasts extremely challenging.
Computerized systems help to reduce costs in many ways from
transporting cargo to stock control. The rapid exchange of
information from the beginning to the end of the supply chain
facilitates decision-making and risk management, and this is where
some companies and startups are seeing opportunities to act.
A successful example of a company that has seen these opportunities
is TipCard, a company located in the agribusiness capital of Brazil,
Cuiabá, where much of the country's cargo transportation operations
take place.
TipCard works to optimize payment of shipping, tolls and truck fleets
as well as providing controls and documental management of
everything involved in the transportation process. The company
system was built with the goal of reducing costs, increase efficiency
and creating transparency for the whole supply chain.
The inefficiency of Brazil's logistics is basically due to four factors:
lack of structure, lack of qualified professionals, bureaucracy and high
costs. Thus, there is no doubt that the problem has negative
consequences for the Brazilian people. Creating competitive
conditions for the domestic productive sector has extreme importance
for the country's sustainable economic growth. If the government
does not adopt future-oriented planning concepts, with adequate
legal security, investors will no longer place resources in the country.
In other words, the determining factor for attracting investment to
the logistics sector depends on the government’s policies, planning
and vision for the future. Therefore, national and international
companies can apply resources, generating jobs, income and
opportunities for all stakeholders involved in the process.

18
Airports auction and other opportunities in the Brazilian
infrastructure sector
Marlon Shigueru Ushiro Ieiri
The Federal Government, through ANAC (National Civil Aviation
Agency), issued on 01/12/2016 the notice of auction no. 01/2016 for
the concession of the airports of Porto Alegre, Salvador, Florianópolis
and Fortaleza. This is the fourth round of concessions of Brazilian
airports included in the National Privatization Program, which started
in 2011 with the São Gonçalo do Amarante (RN) airport concession,
continued in 2012 with the airports of Guarulhos (SP), Viracopos
(SP) and Brasília (DF) and in 2013 with the airports of Galeão (RJ)
and Confins (MG).
The announcement of the current auction brought some news
compared to the previous auctions. The main change concerns the
payment of the award by the winning bidders. In addition to being
reduced to suit the Brazilian economy in recession, whose effects are
felt in the decrease in the annual passenger traffic, the minimum
amount of the concession, stipulated at R$ 2.26 billion for the four
airports, shall be paid in a staggered manner : (i) 25% (plus the
premium of the auction) at the execution of the concession
agreement; (ii) five-year grace period; (iii) increasing installments
from the sixth to the ninth concession year; and (iv) from the tenth
year through the end of the concession, annual fixed installments.
Considering that the initial years of the concession require intensive
investments with the expansion and improvement works of the
airports, this change brings a significant relief to the concessionaire's
cashier. For comparison purposes only, the amount of the grant of
the 2012 and 2013 auctions should be paid in fixed annual
installments, being the first one due 12 months after the execution
of the concession agreement.
Thus, and considering Brazil's economic situation nowadays, with
high interest rates, drop in the movement of the airports and
restrictions on BNDES loans, this provision is positive and certainly
attracted the attention of many bidders interested in participating in
this auction.
The second change well received by the market was the end of the
mandatory participation of INFRAERO (Brazilian Airport
Infrastructure Company) in the concessionaire of the airport,
eliminating, in this way, the risk of political interference in the
course of the management of the concession. Under the previous
rules, INFRAERO should have a 49% stake in the SPE (Special
Purpose Company) to be formed together with the winning bidder,

19
including veto powers in strategic decisions.
Other novelties include the possibility of corporate participation of up
to 2 airport operators with at least 15% of the bidding consortium,
provided they individually prove the operation of airports with the
minimum processing of passengers required for each of the bided
airports, in addition to the possibility of the same economic group
win the dispute of more than one airport, as long as not located in
the same geographic region.
In light of the above, it may be said that the decision of the federal
government to promote revisions in its airport concession program
was correct. The rules applied until 2013 were no longer in line with
the current conditions of the Brazilian economy and called for
reformulations. In this sense, the reduction in the minimum value of
the grant and the new formula for payment of the fixed contribution
installments (grant) were well received by the market and should
stimulate the participation of a larger number of bidders in the
auction no. 01/2016.
Last but not least, it is worth mentioning the Provisional Measure
(MP) no. 752, dated 11/24/2016, which deals with the extension of
partnership contracts in the road and railroad sectors and the rebid
of contracts for road, railroad and airport projects. Specifically,
chapter III of such MP allows for the rebid of projects whose
contractual provisions are not being complied with or whose
concessionaires show that they are unable to comply with
contractual or financial obligations.
Given the situation of the current concessionaires of road and airport
projects, already mentioned above, this is another opportunity for
new companies to take over the ongoing concessions and continue
the much-needed investments to improve Brazilian infrastructure
and, consequently, contribute to the resumption of economic growth
of the country.

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Opportunities and Challenges of the new government 2017
and 2018
Rebecca Maduro
Every crisis brings with it great opportunities. This maxim already
known in the global market has never been so current in Brazil as
now, in the Temer government. With the beginning of the resumption
of investor confidence, the recent cut in interest rates, privatization
packages in strategic sectors such as sanitation and energy, in
progress, signaling for the coming years is a dizzying growth of the
economy. It remains to verify the Government's ability to sanitize
public accounts and implement the necessary adjustments in social
security, to ensure fulfillment of its commitments and the progress of
employment, income and consumption in the country. These would
be the major challenges for the coming years of the current
government.
With regard to the electric sector, we experienced a paradigm shift
with the entry of the new government. In the previous administration,
there was an absence of harmony between the Brazilian energy policy
and the strategy of the energy companies, being many of them with
foreign capital. In this sense, the criteria the government guided the
decisions was directed toward electoral objectives fomented in an
artificiality of energy cost. On the other hand, the current
government operates in another direction. The privatization package
of Eletrobrás’ companies is a clear sign given by the current
government, and despite the problems faced in 2016, Eletrobrás was
still the company that recovered most value in the market, compared
to Petrobras and Banco do Brasil, for example. The government's
program to deverticalize the company, by selling the most distressed
energy distributors, wiping out the staff and cleaning up the
corruption, makes evident that the new management model that is
being implemented is more transparent, efficient and market-oriented.
Among the measures already adopted by the government, many of
them have been relevant in a strategic way, for example, official
visits to important Brazilian partners such as China and Japan,
diplomatic acts neglected by the previous government, opening the
way for the entry of international investors in the country, in a clear
demonstration of interest in maintaining reciprocity and increasing
relations between nations.
The wave of privatizations also benefits the State governments, which
could sell assets in debt renegotiation within a State debt
renegotiation program with the Federal Union. It may seem trivial,
but the idea of the sale of some assets in the discharge of debts will
give the States a new impetus to carry out fiscal adjustment
measures, for example, among others necessary.

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It is true that the image of Brazil in the world has improved with the
new government, but it still remains to verify whether the
government will be able to carry out the structural reforms necessary
to the economy. In this sense, it is fundamental to carry out the
reforms of the social security and the limitation of public spending to
keep us in the virtuous cycle that is about to begin.

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Please note that the paper was prepared with information updated
until January 2017. Additionally, this paper should not be relied upon
as advice for specific case. We therefore encourage you to consult the
specialist directly with any specific issues or questions.
Copyright © 2017 Su Jung Ko All rights reserved. No part of this
publication may be reproduced without a prior written authorization
of Su Jung Ko
6th Edition – February 2017