IDB loan supports expansion of Brazil's Florianópolis-Osorio highway

By Richard High04 September 2008

Economic growth and the transport of goods and people in Brazil is being hampered by the poor state

Economic growth and the transport of goods and people in Brazil is being hampered by the poor state of many of the country's roads, which become impassable in the rainy season.

The Inter-American Development Bank (IDB) has agreed a US$ 100 million loan to help Brazil expand the capacity of its Florianopolis-Osorio highway, part of the Mercosur corridor.

The highway is a major transportation route between Argentina, Brazil, Paraguay and Uruguay.

Commenting on the loan, IDB team leader Esteban Diez-Roux, said, "The program will improve the efficiency and safety of the highway, contributing to the sustainable economic development of the southern part of Brazil and facilitating the region's economic integration with the other Mercosur countries.

"The number of lanes will be doubled to four in key segments, facilitating transit in a corridor that connects highly-populated centres of economic activity."

"Two innovative aspects of this program are the decision to provide incentives both for the establishment of long term road maintenance contracts and for the introduction of vehicle weight control systems. Improving road safety has also been a prime concern during project design," added Mr Diez-Roux.

The loan forms part of the final stage in a lengthy process to develop the Mercosur highway corridor. Extending for almost 1600 km in Brazil, it will link the states of Minas Gerais, Rio de Janeiro, São Paulo, Paraná, Santa Catarina and Rio Grande do Sul with a four lane limited access highway.

According to the IDB, the bank and the Brazilian government have now agreed on a strategy that "prioritizes productivity and infrastructure". This program, said an IDB statement on its website, will "increase Brazil's competitiveness through transportation cost reduction on one of its main economic corridors and improve regional integration and communication with neighbouring countries."

In the last decade, IDB support to Brazil has focused on expanding the capacity of the Mercosur corridor, one of the main initiatives for the economic integration of South America. The Bank has financed programs to improve the Fernão Dias and São Paulo-Curitiba-Florianópolis highways and co-financed the federal highway rehabilitation and decentralization program, involving works on 13000 km of roads and their transfer to the states.

Brazil's National Department for Transportation Infrastructure (DNIT) will carry out the work.

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