Brazil to complete São Paulo beltway with $1.15 billion loan from the IDB

The Inter-American Development Bank (IDB) announced today the approval of a $1.15 billion loan for the construction of the 44-kilometer North section of the Mário Covas Rodoanel highway in São Paulo. This section will complete the177-kilometer multiple-lane beltway, one of the largest and most critical transportation infrastructure projects ever undertaken in Brazil.

In construction for more than a decade, the Rodoanel is already improving the efficiency of transportation for both cargo and passengers, reducing traffic congestion and pollution and improving the quality of life and productivity in the São Paulo metropolitan region.

“With the North section of Rodoanel ready, a major portion of the heavy traffic going to the port of Santos, MERCOSUL and other regions of the country will no longer have to cross the city, therefore reducing congestion,” said Vera Lucia Vicentini, IDB specialist and project team leader. “The population of the entire metropolitan area will enjoy better mobility and better connectivity, not to mention increased safety during their trips.”

The Greater São Paulo Region faces serious congestion problems for several reasons, including a 5 percent annual growth rate in vehicle traffic in the metropolitan area and the radial-type design of the 10 major highways in the area, which force 1 million vehicles to ride through the middle of the city each day. The two main thorough fares in São Paulo—Marginal Tietê and Marginal Pinheiros—are saturated with traffic 60 percent of the time and suffer numerous accidents.

Together with Ferroanel, a railroad beltway, and the creation of integrated logistics centers, the Rodoanel project should also improve access to major production and trading areas, as well as international connection centers, thus reducing travel times, lowering transportation costs and improving productivity.

The North Section is expected to be completed in November 2014, with financing from three sources: $1.15 billion in IDB funds, $980 million from the federal government and $890 million from the São Paulo state government. The North section will link the edge of the East section—at the intersection with Presidente Dutra highway—with Raimundo Pereira de Magalhães Avenue, at the beginning of the West section.

There will also be interconnections to Guarulhos International Airport and the Fernão Dias highway.

Following the completion of the North section, a drop of 10 percent in the average daily volume of traffic is expected for the first year of operation, reaching a total drop of 13 percent by 2024. This could result in a 17 percent increase in average vehicle speeds. Moreover, the North section should contribute to a reduction of around half a million tons per year in carbon dioxide emissions and an 18 percent decrease in particle materials generated by the traffic in Marginal Tietê.

The IDB loan is for 25 years, with a five-year grace period and a variable interest rate based on LIBOR.

IDB. News Releases.Nov 8, 2011