Brazil´s state of Mato Grosso, responsible for the largest output of soybean, corn, cotton and beef in the country, will auction more than 500 kilometers (311 miles) in road construction and investment in a push to cheapen and speed up exports to China.
Mauro Mendes, the governor of Mato Grosso, said the plan to upgrade and expand roads is expected to generate 6 billion reais (USD 1.1 billion) in investments, are part of a statewide plan to connect farms to ports.
As Chinese demand keeps soaring, the producers need to find easier ways to maximize their gains, Mendes said, according to Bloomberg.
The private investment can free the government to spend on other infrastructure works, he added.
All of the roads will connect to the BR-163, a major transit artery that cuts Brazil from north to south, and could ease access to the northern ports, which Imea, a think tank sponsored by Mato Grosso oilseed growers, estimates could reduce producers’ costs by 16%.
The Santos port, Brazil’s biggest and busiest, is at least 1,000 kilometers away from Mato Grosso’s farms. Using the northern gateways could also shorten the time toreach China through the Panama Canal.
“There will be bigger competition for two of the lots of roads auctioned as the proposals have been sent, and this means lower toll rates for the trucks, as this is the main focus of the bidding,” said Camillo Fraga, business director of Houer, a consulting firm responsible for modeling the auction.
With the completion of around 1,400 kilometers of roads by 2022, Mato Grosso, that still has the largest planted area in the country, will be second only to the richest state in Brazil, Sao Paulo, in built-road mileage, Bloomberg adds.
