By Brazil Stock Guide – Brazil’s federal government will auction the Fernão Dias highway concession on Thursday (11), in what is expected to become one of the most competitive infrastructure tenders of the year. The 570-kilometer road, linking São Paulo and Belo Horizonte, is being rebalanced under a 15-year contract that analysts say offers appealing economics and relatively low traffic risk.
The project involves R$9.5 billion in capital expenditure, with about 43% to be deployed by the fourth year, and an additional R$5.4 billion in operating costs over the concession period. The corridor’s established demand profile — serving key logistics hubs such as Betim in Minas Gerais — reinforces expectations of stable revenue and supports the regulatory internal rate of return of 11.41%, higher than in recent federal auctions.
Leverage Seen as Manageable for Operators
Despite the project’s scale, specialists believe leverage should not constrain major players, given expected EBITDA growth under immediate toll operations across eight plazas and scheduled tariff adjustments. Firms such as Ecorodovias and Motiva are considered well-positioned; Motiva benefits from financial flexibility following the sale of its airport platform and from potential synergies with the Rio–São Paulo corridor.
Bidding Rules Aim to Curb Overly Aggressive Offers
Bids are due on Monday (8), with the auction held three days later. The winner will be selected based on the highest toll discount. Once that discount exceeds 18%, additional upfront payments apply on a progressive scale:
- 18–23%: R$123 million per percentage point
- 23–30%: R$147 million per percentage point
- 30% or above: R$184 million per percentage point
The tiered structure is intended to discourage unsustainably aggressive bids while preserving competitive tension.
Market Expects More Rivalry Than in Past Rebalancing Auctions
While previous federal rebalancing processes — including MSVias and Eco101 — attracted little competition, conditions around Fernão Dias differ. Analysts cite the concession’s strong economic fundamentals, predictable traffic patterns and updated bidding rules as reasons for heightened interest.
Potential bidders mentioned in industry circles include EPR, BTG Pactual (BPAC11), XP (XP), Kinea, Arteris and Via Appia. Among listed entities, XP (XP) stands out as both advisor and prospective investor, while operators with a strong Southeast presence — notably Motiva — are seen as strategically aligned with the asset.