Temer is killing the PAC, says former secretary of the program.

By Maurício Muniz, in GGN newspaper - The name change from Growth Acceleration Program (PAC) will only crown the destruction of the infrastructure planning and execution instrument in Brazil that, in the last ten years, delivered to the population 3,1 million housing units through the Minha Casa Minha Vida program, urban mobility works (51), urban sanitation (4.660), airport expansions (54); more than 4 kilometers of new highways and more than 3,2 kilometers of dual carriageways. In addition to 3 million electricity connections in the Luz para Todos program, among other works in railways, ports, electricity, slum upgrading, water pipelines and dams.

The PAC (Growth Acceleration Program) spurred the resumption of planning and investment in infrastructure by both the public and private sectors. Under the coordination of the Presidency of the Republic (Lula and Dilma), there was a continuous process of planning, monitoring, and evaluating these investments. The PAC represented an advance in the management of Brazilian state infrastructure, a construction that involved the public (federal, state, and municipal) and private sectors. It is an instrument that should continue and be improved, even if under a different name.

The destruction of the PAC (Growth Acceleration Program) compromises transparency, coordination among federal agencies and with states and municipalities, and between these agencies and the private sector. It interrupts a cycle of planning restructuring and allows for the resurgence of old, less republican practices. 

With the PAC (Growth Acceleration Program), the sectoral ministries – Transport, Energy, Cities, Integration – were required to plan and execute a portfolio of projects aligned with national and regional growth objectives. All projects were widely known, publicly available, and had resource estimates and schedules. In addition to transparency, there was assurance of the availability of resources for the execution of the General Budget of the Union (OGU). In this way, synergy was built between projects executed with public funds and those executed by the private sector.

With the announced reduction of the PAC (Growth Acceleration Program) to only projects funded by the Federal Budget, the capacity to coordinate infrastructure as a whole is lost. For example, the duplication of a highway with public funds can guarantee its subsequent concession. Therefore, the interventions in the public works project must be included in the concession agreement. The construction of a railway must also be linked to its future concession. Similarly, a new hydroelectric plant should be considered in conjunction with other sanitation and housing projects, often carried out with Federal Budget funds.

Separating the coordination of public works management from the coordination of works executed by the private sector means losing the capacity for coordination and the gains of integrated planning.

The PAC also signified the resumption of infrastructure planning carried out by states and municipalities. The program established a transparent and periodic system for selecting projects throughout Brazil. This created the need for states and municipalities to develop plans and projects to compete for access to resources.

Since these selections were public, national, and transparent, the political use of public resources was eliminated.

Furthermore, coordinating the execution of a portfolio of public or private works allowed the government to identify specific obstacles for each project and those common to all projects. Through this process, it was possible to make progress and overcome historical bottlenecks, such as in bidding processes, with the Differentiated Public Procurement Regime (RDC), in environmental licensing processes, in financing conditions, guarantees, regulatory advances, among others. The execution and monitoring capacity of the ministries was reorganized, and a specific career path was created to do this work: that of Infrastructure Analysts.

The situation today is quite different. Public resources for infrastructure were undermined during the Temer administration. In 2016, PAC payments using resources from the Federal Budget were only R$ 42 billion, compared to R$ 86,4 billion paid in 2014. In 2017, there was another reduction, to R$ 37 billion, which is the limit set for movement and commitment in the PAC (Decree No. 8.961/2017). 

At the very moment when the country most needs to create jobs and reduce the cost of its products to compete globally, one of the main instruments capable of making Brazil advance towards these objectives is being eliminated. It is the return of the old bet that the market alone fulfills the role of regulating and planning interventions.

To make matters worse, there was also a significant reduction in the capacity to plan and implement interventions through concessions. The country lost almost a year without granting a concession for a highway, railway, or airport.

In addition to destroying the capacity to carry out projects with public funds, they are doing the same with projects under private concessions.

The portfolio of the Logistics Investment Program (PIL) has been reduced by 93,5%, from 170 to 11 projects in the logistics area under the now-called Investment Partnership Program (PPI) or Crescer. Besides delaying the granting of new concessions, they are removing investment obligations from companies in these concessions. What's the point of granting concessions anyway? If the new concessions happen now, new investments will only begin at the end of 2018 or 2019. It takes one and a half to two years for construction to begin after the publication of the tender.

Soon, granting concessions will mean only a business deal for the concessionaire, and only a way for the State to collect revenue through grants. In other words, it will not mean expanding infrastructure capacity or reducing logistics costs.

With the destruction of the PAC (Growth Acceleration Program) and its planning and coordination logic, however, the most affected will be the population, especially those with low incomes. Urban mobility projects have practically stopped, as have water resource projects, housing construction, and sanitation works.

The much-publicized resumption of stalled projects is a huge list of small projects carried out by municipalities, often without any implementation capacity. Did the federal government discuss with states and municipalities which projects should be resumed? What criteria were used to select these projects?

In a short time, Brazilian society lost the right to know the government's plans, their costs, schedules, and investment priorities. Brazil stopped growing, the Brazilian population lost jobs and income, companies lost business opportunities, and the State lost its capacity for governance.