Carolina Pulice

(Reuters) During its tenure in office, Jair Bolsonaro, Brazilian president has orchestrated more than 35 privatizations. It has had to retract its promises due to political pressures, Congress’s inability and dearth of support.

These are key facts

INITIAL PLANS

Privateization Secretary Salim Matar, announced in April 2020 plans to sell 17 companies. These included Telebras state telecommunications operator, Casa da Moeda min, Telebras federal data processors Dataprev, and Serpro federal data processors. Eletrobras, Latin America’s largest utility, could also be sold, he stated. Infraero is the federal data processor Dataprev and Serpro, while Conab, the crop supply agency, may also go up for sale.

PRIVATIZATION AGENDA

Only major Petrobras-owned companies have been privatized so far. Petroleo Brasileiro SA (the state-owned Petroleo Brasileiro SA), as it’s formally called, sold a portion of its fuel distribution arm BR Distribuidora via a share offer in mid-2019. Petrobras purchased the remaining 37.5% of Vibra Energia’s stake for more than 11 billion reais ($2billion) in June. Petrobras also purchased its Liquigas liquefied petroleum gasoline unit (LPG) in December 2020 as well as assets Transportadora Associada de Gas (“TAG”)in July 2018.

Eletrobras will also soon be privatized. But, delays by the General Accounting Office have stalled the process. On Wednesday, they delayed their analysis of the sales formula that would dilute the state’s interest by floating shares. The approval of this sale formula to dilute the state’s stake by floating shares may be delayed until next year.

In the second quarter of 2018, seven auctions were scheduled for federal companies. Some of these auctions were postponed to next year like the Port of Vitoria or Minas Gerais’ food supply center Ceasaminas.

Last week, government officials decided to remove Casa da Moeda from the list of privatization targets. Economy Ministry said there were restrictions on the government’s partnership with private sectors to issue money or stamps.

WHAT IS AT RISK?

Bolsonaro, who was elected to office in 2012 promising to support state assets sales, has been a major roadblock for parts of the privatization plan. A few of the sales were vetoed personally by the president, like those for the Sao Paulo food supply chain Ceagesp.

The planned privatization of the mail service won’t happen in this year either. O Globo reported that the government could not find sufficient support from Congress in order to sell Correios by 2021. Bolsonaro, however, has expressed some interest in the free-market agenda of his government. Last April, he celebrated the privatization of Rio de Janeiro’s state sanitation company Cedae, which raised 22.7 billion reais, saying it was a history-making moment for Brazil, its economy and its markets.

President Trump has spoken out in favor of the privatization plan for Petrobras, Brazil’s largest corporation. According to him, such a move could be used to curb fuel price rises. On Tuesday, however, Paulo Guedes, the Economy Minister, stated that Petrobras privatization was not on his government’s agenda, or in any way in line with its “first mandate.”

An immediate response was not received from the ministry to our request for comment.

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