Jan 16, 2023

Brazil's "Soybean Highway" Upgrade One Step Closer to Starting

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The start of construction to upgrade of Brazil's "Soybean Highway" in Mato Grosso is inching closer to starting. Negotiations are in their final stage for the transfer of the contract to upgrade highway BR-163 within the state of Mato Grosso from a 2-lane highway to a limited access 4-lane highway. Meeting were held last week between the original contractor, Rota do Oeste, and the state government of Mato Grosso concerning the contractor's outstanding debts.

Mato Grosso agreed to assume R$ 920 million in debts that the contractor owes to Brazilian banks. The state of Mato Grosso is also expected to spend R$ 1 billion completing the project.

The state will take over the project to upgrade BR-163 from the city of Sinop in northern Mato Grosso to border with Mato Grosso do Sul. The upgrade was scheduled to be completed years ago, but only about 25% of the more than 800-kilometer project has been completed.

BR-163 was converted to a toll highway to pay for the upgrade and they have been collecting tolls for a decade, but the original contractor has been plagued by financial scandals and they indicated that they did not have the financial resources to complete the project. It has taken years to resolve this in court because the contractor tried to renegotiate the contract to keep control of the project. The Brazilian courts finally decided that was not feasible and they awarded the contract to the State of Mato Grosso.

The citizens of Mato Grosso have been waiting decades for this upgrade. BR-163 is the most important highway in Brazil as far as agriculture is concerned. Mato Grosso is the largest grain producing state in Brazil and most of the grain produced in the state moves to export markets via BR-163.