Toll suspension in Paraná should take R$ 134 million from city halls – 11/26/2021 – Market

The suspension of toll collection on Paraná’s roads should withdraw around R$ 134 million from the cash flow of almost a quarter of the state’s municipalities.

As of this weekend, traffic on the highways of the so-called integration ring of Paraná will be free, since the contract signed in 1997 with the concessionaires that manage these highways expires.

Part of the highways will no longer be charged on Saturday (27); another part, on Sunday (28).

Without the toll, the ISS (Service Tax) on the work of these companies is no longer collected. City halls are responsible for the collection. They are the ones who will lose the fundraiser.

Of the 399 municipalities in Paraná, 90 received taxes paid by one of the six highway concessionaires in the state. In 2020 –the last year with consolidated data–, companies paid BRL 134 million in ISS.

The federal and Paraná governments have an agreement to re-auction the highways, both those in the integration ring and others that will enter the bidding process. The initial forecast was that the auction would take place in time for the new concessions to come into operation after the end of the previous contracts. However, with postponements, the event has not yet taken place, and the new forecast is that the new contracts will only be signed in the last quarter of next year.

This means that Paraná’s roads will be free of tolls for about a year. Hence the forecast that approximately R$ 134 million will no longer be collected by the municipalities.

According to data provided by DER-PR (Department of Roads and Highways of Paraná), the city of Ponta Grossa ( 115 km from the capital Curitiba) was the one that received the most ISS from toll concessionaires last year: R$ 7, 9 million. According to its finance secretary, Claudio Grokoviski, the amount represents about 7% of everything the municipality collects from the tax.

He said that 25% of the ISS received from concessionaires is allocated to the education budget. Between 15% and 20% go to health care in Ponta Grossa, which has around 350 thousand inhabitants.

Grokoviski said the municipal administration was not opposed to the temporary suspension of toll collection, but said it could be done in another way.

“For better budgetary and financial programming of the affected municipalities, this measure could be taken gradually, so that there would not be a time gap without collection”, he said.

The finance secretary of Morretes, Cesar Pereira, said he hopes the state government will compensate the cities for the momentary loss of revenue.

Morretes (69 km from Curitiba) has around 16 thousand inhabitants. Received R$5.9 million in ISS related to tolls last year and R$4 million this year, until August. This, according to Pereira, represents 10% of all municipal revenue.

The secretary stated that the loss of this revenue is worrying. He said he hopes to maintain municipal investments by resorting to financing from development agencies and banks. The payment of current expenses, however, may be impaired.

“The impact will be on the cost,” he stated. “But we won’t have cuts in salaries, in school maintenance and in our hospital.”

When contacted, the government of Paraná did not say whether it intends to contribute to cities whose revenue will be reduced after the end of toll contracts.

He only informed that “the concession process has been discussed for several years with mayors, business leaders, various institutions and other powers” and that it will “generate dividends for the 399 municipalities in the long term”.

Tolls on Paraná’s highways cost R$26 per car and are considered by the state government to be one of the most expensive in the country.

The new auction of concessions hopes to reduce tariffs between 40% and 50%, contemplating companies that commit to administering the roads, charging the lowest amount from users.

To try to guarantee that investments foreseen in the concession are carried out, the government will demand from companies that offer discounted rates a security deposit to cover the works.

The new round of road concessions in Paraná is the largest project of its kind ever announced in Brazil. It involves the auction of 3,300 km of state and federal roads, divided into six lots.

The winning companies will have to invest R$43 billion in improvements over ten years. This amount will cover, among other things, the duplication of 1,700 kilometers of roads.

Apart from the investment, another R$ 35 billion will be spent by the concessionaires for the maintenance and operation of the highways during the 30-year contract.

According to ANTT and the Ministry of Infrastructure, the postponement of the schedule for signing the concession contracts was due to the large volume of suggestions received by the agency in the virtual public hearing held on the project.

There were more than 6,000 – the largest number of contributions in ANTT’s history.

While the new concessionaires do not take over the roads, the government of Paraná will maintain them. DER-PR has already launched a R$135 million tender to contract services that are currently provided by companies.

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