By Brazil Stock Guide – On the eve of the auction for the Santos-Guarujá underwater tunnel concession, scheduled for Friday, Brazilian construction giants Odebrecht and Andrade Gutierrez have withdrawn, according to a report by Folha de S. Paulo. Their exit opens the way for Spain’s Acciona (ANA.MC) and Portugal’s Mota-Engil, partly owned by China Communications Construction Company (601800.SS), to compete for the project.
Both Odebrecht and Andrade Gutierrez cited financial hurdles, including strict collateral requirements by Brazil’s development bank BNDES, the weight of high interest rates, and lingering fallout from the Lava Jato corruption probe, which continues to limit their access to credit and investment capacity.
Domestic retreat, foreign advance
With Brazilian groups stepping back, Acciona emerges as the clear favorite. The company already holds multibillion-real contracts in São Paulo, most notably the Line 6-Orange of the city’s subway system, structured as a public-private partnership and financed partly by BNDES.
Mota-Engil, the other bidder, brings the backing of China’s state-controlled CCCC, signaling Beijing’s strategic interest in Brazil’s infrastructure sector. Still, analysts view Acciona’s established ties with São Paulo governor Tarcísio de Freitas as a decisive advantage.
Financial strain from Lava Jato
Industry experts emphasize that the combination of elevated borrowing costs and reputational damage from Lava Jato has weakened Brazilian firms. “This project is about the ability to contract debt,” lawyer Fernando Vernalha, an infrastructure specialist, told Folha de S. Paulo. “We live in a scenario of high interest rates, and financial costs are steep.”
Although some of the multibillion-real fines imposed during Lava Jato have been reviewed by courts, the scandal’s consequences still weigh heavily on corporate balance sheets, restricting participation in large-scale projects.
Acciona’s dual image
Acciona’s rise in Brazil coincides with reputational challenges in Spain. Spanish police are investigating allegations that the company paid €620,000 in bribes to Socialist Party politicians. The company says it has dismissed the employee linked to the case and launched an internal probe.
Despite the controversy, Acciona’s presence in Brazil continues to expand, underscoring how foreign groups are filling the void left by once-dominant national builders.
Billion-real investment
The tunnel project, valued at 6.8 billion reais ($1.4 billion), will be Brazil’s first immersed underwater connection. The 30-year concession will be structured as a PPP, with 5.14 billion reais funded by federal and state governments and 1.66 billion reais from private investors.
Revenue will come from tolls and annual government payments ranging between 430 million and 550 million reais. The engineering plan includes installing six prefabricated modules on the seabed, marking a milestone in Brazilian infrastructure.