ANNUAL REPORT 2017 ANNUAL REPORT SCENARIO 1

Transcription

1 ANNUAL REPORT 2017 ANNUAL REPORT SCENARIO 1

2 CONTENTS SCENARIO ANNUAL REPORT 2017

3 MESSAGE OF THE CEO Chapter SCENARIO Chapter 2 ABCR AGENDA Chapter 3 ABCR CONGRESS 2017 Chapter 4 OPERATING CONCESSIONAIRES Chapter 5 PROSPECTS ABOUT THE REPORT ANNUAL REPORT SCENARIO 3

4 MESSAGE OF THE CEO INFRASTRUCTURE NEEDS TO ACCELERATE César Borges CEO of ABCR It s more than time for us to have a vision of progress and for the long-term for the program of concession highways. We know that this is the way and ABCR, as the legitimate representative of the sector, is committed to broadening the frontiers of dialog to search for efficient solutions that again boosts the model of concessions in Brazil. We have become accustomed to repeating the discourse that the evolution of Brazilian infrastructure depends on the participation of private capital, through programs of concession, through public-private partnerships. We know that the Brazilian public sector does not have the capacity to invest in infrastructure. We look to the private sector to compensate for this deficiency, so that the state can care for its essential functions. The tangle of unnecessary regulations and the lack of legal certainty creates an unattractive environment for private, national and international investment. Even with so much evidence, a question still remains unanswered: if the participation of private initiative is unanimous, why does nothing happen? Why can t we address the problems of the current federal concessions and least of all, realize new feasible and realistic proposals? The highway infrastructure scenario in Brazil today has two opposing fronts. In the states, highway concession programs are moving swiftly. São Paulo - whose program completes 20 years in holds today the 19 best highways in the country, according to traditional technical research carried out by the National Transportation Confederation (CNT). They are all granted to the private sector. Other states, such as Bahia, Mato Grosso, Minas Gerais and Pernambuco, among others, also successfully maintain highway concession contracts with private sector enterprises. Paraná, the pioneer of road concessions, seeks to adapt the contracts, but remains steadfast in preserving the program. 4 MESSAGE OF THE CEO ANNUAL REPORT 2017

5 We have maintained a continuous and transparent republican dialogue with the granting powers,regulators, control bodies and parliamentarians, with the objective of conveying the legitimate claims of the sector. The model of federal concessions needs to be revised, inspired by the good practice in the states. According to calculations by ABCR associates, the concessionaires could invest almost R$30 billion in modernization and maintenance of nearly 10 thousand kilometers of federal highways. However, the last federal auction was in 2015, in truth, a rebidding of the Rio- -Niteroi bridge. Since then, no public notice of bidding for highway concessions has been published. During this period, the state of São Paulo held three successful auctions, which together totalled almost R$3 billion granted to the public coffers. Today, 40% of the São Paulo road network is conceded, while the federal network only has 15% with concessions, which may fall if the government cannot preserve the contracts of the 3rd Stage, which bring together half the concession highways. According to a study by CNT, private investments in highways are 122.1% higher than public ones, although the extent of the public network surveyed is 2.5 times larger than the private one. There is missing a plan with a clear perception of the needs of a concession to private initiative. Missing too, is a focus and political will in the federal government. The creation of the Investment Partnerships Program (PPI), linked to the Civil House of the Presidency of the Republic, brought to the sector the expectation that the node of logistics concessions would finally be unleashed. But we still see a tangle with laws and provisional measures that are still to be regulated. In 2017, the work of ABCR was arduous, with participation in public hearings in Brasilia, meetings with authorities and representatives of the National Congress and participation in important events of the sector. The ABCR Congress, which reached its 10th edition was also an important forum for the debate on vital points for the progress of concessions. During the whole year, we have maintained a continuous and transparent republican dialogue with the granting powers, regulators, control bodies and parliamentarians, with the objective of conveying the legitimate claims of the sector. We have also launched the new Code of Conduct of ABCR, a guideline for corporate governance that reinforces the preoccupations of the association in maintaining compliance with the internal and external scope. It is more than time for us to have a long-term vision of progress for the federal government highway concessions program. We know that this is the way for ABCR as the legitimate representative of the sector and that there is a commitment to broadening dialogue to find efficient solutions to boost the model of concessions in Brazil. Here is my invitation so that in the next pages, you can follow all the activity of ABCR in 2017 for the benefit of the concessions sector and more than this to work for the greater interests, to have a country with a first world logistics infrastructure, with a solid foundation for our development. Good reading. ANNUAL REPORT 2017 MESSAGE OF THE CEO 5

6 2017 SCENARIO SCENARIO ANNUAL REPORT 2017

7 SLOW RECOVERY IMPACTS CONCESSIONS SECTOR After two years of decline, the Brazilian economy registered signs of growth of 1% in A timid recovery compared to the average growth of the global economy of 3.5%. However, the improvement in activity has not yet been disseminated among all sectors, including the concessions highways. The economic scenario was marked by a fall of inflation, interest rates and unemployment, in the last months of the year, in parallel with a political framework of uncertainty, especially with the proximity of elections in Due to the economic crisis, the fiscal adjustment applied by the government in 2017 resulted in cuts in investments in political and public programs; the Growth Acceleration Program (PAC), itself later transformed into the Advance Program, lost R$13 billion in relation to the budget forecast for the year - a fall of 36%. Investments in infrastructure fell 26% between 2014 and 2016 according to the Planning and Logistics Company (EPL), and the federal highways problems over the last few years. In addition, barriers between the federal government, control bodies and congress paralyzed the sector in a universe of R $ 30 billion of investments in the improvement and expansion of roads, according to ABCR estimates. As a result, investments in federal highway works slowed in Among the concession highways, the only innovation was the inauguration of the dual carriageways of Serra do Cafezal on the Autopista Régis Bittencourt. ANNUAL REPORT SCENARIO 7

8 ADVANCES IN SP The new concessions package in São Paulo marked significant advances, with the inclusion of Rodoanel Norte. With 44 km of extension, the ring road will interconnect the stretches West and East of the Rodoanel. The northern section, scheduled for 2018, starts at Avenida Raimundo Pereira Magalhães, the former Campinas / São Paulo highway (SP-332), and ends at the intersection with the Presidente Dutra highway (BR-116). The section provides access to the Fernão Dias highway (BR-381), as well as, an exclusive connection of 3.6 km to Guarulhos International Airport. The conclusion of the outskirts of Taubaté, on the Carvalho Pinto highway, with an extension of 12 km, allows access to the Oswaldo Cruz highway. There was also the auction that determined the concession of the Rodovia dos Calçados for the group Arteris. The route is 720 kilometers long and crosses practically the entire State of São Paulo, North to South, covering stretches of ten highways in the interior of the State, in a network that crosses 35 municipalities in the regions of Bauru, Franca, Itapeva, Ribeirão Preto, Sorocaba and Central. The project contemplates R$5 billion in investments over a 30-year concession period, with R$2.1 billion to be realized in the first eight years. In another auction, Pátria Investimentos won the right to administer the lot of 570km of the Rodovia do Centro-Oeste,São Paulo, the cities of Florinia (on the border with Paraná) and Igarapava (limit with Minas Gerais). The grant involves investments in the order of R$3.9 billion over the 30-year concession period, also with R$2.1 billion for the first eight years. LAW : LESS EFFECTIVENESS FOR THE SECTOR In the legislative sphere, 2017 was marked by a lot of movement, but with ineffective results for the sector. In June, Law /2017, originating from the so-called MP of Concessions (MP 752). The text establishes conditions for the extension and re-bidding of contracts in the highways, rail and airport sectors. For the projects that are part of the Partnership Program of Investments (PPI), created by Law /2016. The extension may be for the life of the contract or anticipated, with a change of the deadline before the adjustment term expires. In the view of ABCR, even though it has the objective of solving in part the serious problem of federal contracts of the 3rd Stage, the law has not yet had the necessary regulations for its effectiveness. MP OF REPROGRAMMING OF INVESTMENTS DOES NOT ADVANCE In an attempt to adjust concession contracts and restore financial equilibrium and security of the statutory federal concessions contracts, especially those of the 3rd Stage of the Investment Program in Logistics (PIL), the Ministry of Transport published, at the end of 2017, Decree 945. The text brings terms and conditions for the National Land Transport Agency (ANTT) to conduct reprogramming of investments in federal highway concessionaires to extend the originally forecast execution period. The measure regulates the text of Provisional Measure 800. However, throughout 2017, MP was not included in the voting list of the National Congress, which hindered the opportunities for the renegotiation of contracts, leading MP 800 to lapse, without having been used, during its validity, to solve problems of the highways of the 3rd Stage. MP 800 would allow the concessionaires of the 3rd Stage to extend by 14 years the term for the reprogramming of investments - the 3rd Stage of the PIL was initiated in 2013, with investments of R$42 billion in phases 1 and 3, aimed at doubling the country s main road hub. Since then little progress has been made, given the political and economic obstacles to make viable new concessions at the federal level. The reformulation, according to the text, can be based on the business plan of companies or feasibility studies of competition. In addition, changes in investments could only be made once within each concession contract. In order to maintain the economic and financial equilibrium of the contract, the reprogramming could be by a reduction of tariffs, a reduction of the time of concession, or by a combination of both SCENARIO ANNUAL REPORT 2017

9 NATIONAL LOGISTICS PLAN ANTICIPATES INVESTMENTS UNTIL 2025 The Planning and Logistics Company (EPL) announced in 2017 the new National Logistics Plan, which identifies the necessary improvements to the country s transportation infrastructure up to According to the research, which will be revised annually from 2017 onwards. Investments are necessary of R$132.6 billion in the transportation logistics of Brazil until According to EPL, there are currently 2.3 trillion tons of cargo in circulation throughout the country. ADVANCE PROGRAM One of the actions of the federal government to reinvigorate the sector was the Advance Program, launched in the second semester, with the objective to finish 7,439 works that are paralyzed. With investments scheduled for R$130.9 billion, the program envisages the completion of highway dual carriageway works, restoration of airport runways, sanitation, creches and basic health units, among others, until the end of The government hopes, with Advance, to resume public investments that have been paralyzed, in order to guarantee the country s fiscal balance. PLANNED CONCESSIONS Highway Concession type Status BR-364/365 (MG e GO) Federal PPI Concession of 437 km stretch under analysis by TCU BR-364 (RO e MT) Federal PPI In study: concession of 806 km stretch BR-153 (GO e TO) Federal PPI Will be auctioned again after the concessionaire lost the concession BR-101 (SC) Federal PPI Concession of 211 km section under study Rodovia de Integração do Sul (BR-101/290/386/448 RS) BR-116 (NovaDutra SP e RJ) BR-116 (CRT Além Paraíba à BR-040) Federal PPI Federal PPI Federal PPI 473 km concession under analysis by TCU Study of the rebidding for the stretch between São Paulo and Rio de Janeiro whose contract expires in 2021 A survey of the km stretch between Rio de Janeiro and Teresópolis, to the border with Minas Gerais BR-040 (Concer MG e RJ) Federal PPI Study of rebidding for a stretch of km, Rio / Juiz de Fora Estradas da Rede Estadual do Ceará Rodovias GO - 010/020/060/070/080/139/ E213 State State A study of the transfer of the management of part of the state road network for private initiative In preparation, the concession of 896 km Pró-Estradas Matogrosso State In preparation the concession of 525 km of highways Rodovia MS-306 State In the study the concession of stretch of 200 km BR-135, MG-231 e LMG-234 State In preparation the development of km of road network MG-424 State Under study the development of km of highway BR-459, BR-146, MG-290/295/455/459 State In preparation, the development of km of highways Transcerrados PI-397 State In study the construction of Lot 1, with an extension of km and implementation of lots 2 and 3, with km and km ERS-324/287/020 State Study of partnership with private initiative for the administration of roads Rodovia dos Calçados (SP-249/255/257/281/304/328) Rodovia do Centro Oeste Paulista (SP-266/294/322/328/330/333/351) State Granted to Entrevias (Pátria Investimentos) in 2017 State Granted to ViaPaulista (Arteris Group) in 2017 ANNUAL REPORT SCENARIO 9

10 ABCR INDEX: VEHICLE FLOW UP 1.9% ON CONCESSION HIGHWAYS In 2017, the indicator of the total flow of light and heavy vehicles on concession highways increased 1.9% compared to the previous year. The small growth shows evidence of the gradual return of economic activity in the last year. The index is produced by the Association in partnership with Tendências Consultoria, which forecasts that the flow of heavy vehicles will again grow in It s an indicator of great importance for the analysis of the Brazilian economy, which is ruled by the high frequency measurement and correlates with other relevant indicators, such as GDP, industrial production, retail sales and salaries, among others. CNT RESEARCH OF HIGHWAYS The 21 st edition of the CNT Highways Survey evaluated 105,814 kilometers of highways, an increase of 2.5% compared to 2016 (2,555 kilometers). The classification regular, bad or very bad reached 61.8%. While in 2016 the index was at 58.2%. In 2017, 38.2% of the highways were considered in good or excellent condition, while a year ago the percentage was 41.8%. Signage was the aspect that had deteriorated the most: in 2017, the percentage of highways with excellent or good signalling fell to 40.8%, compared to 48.3% in The fall in quality is directly related to a history of low investment in the highway infrastructure, especially from 2011 onwards - and with the economic crisis of the last two years. According to the CNT Transport and Logistics Plan, in order for the country to have highway infrastructure suited to demand, investments of the order of R$ billion are necessary. In the ranking of 100 HIGHWAYS the best 19 are concessions and 18 are in the state of São Paulo 74.4% OF CONCESSION HIGHWAYS were evaluated with the criterion excellent or good Only 29.6% of highways under public administration were evaluated positively For the 6 th CONSECUTIVE YEAR in first place was the stretch between São Paulo and Limeira, which includes SP-310 / BR-364 and SP SCENARIO ANNUAL REPORT 2017

11 HIGHWAY NETWORK DENSITY BY COUNTRY Values in km/1000 km² 8 CANADA U.S.A RUSSIA MEXICO 70 3 COLOMBIA BRAZIL 24.8 CHINA ARGENTINA 25 7 URUGUAY 43.9 AUSTRALIA 46 Source: National Confederation of Transport (CNT) with data from the National System of Traffic (SNV) and the American Intelligence Center (CIA) According to the National System of Traffic (SNV), Brazil s annual highway network comprises 212,866 kilometers of paved roads, offsetting 1,365,426 kilometers of unpaved roads. Although increasing in recent years, the density of the paved highway network area of Brazil is still small, when compared to the network size of other similar sized territories or even with other countries in Latin America. To have an idea, Brazil has a density of about 24.8 kilometers of paved highways for each1,000 km2 of area, much less than the density of countries such as the United States, China and Colombia. ANNUAL REPORT SCENARIO 11

12 CONCESSIONS: A MODEL OF SUCCESS THE BASIS OF THE MODEL LAWS: 8,987/95-9,074/95 WHAT ABOUT THE CONCESSION LAW: 10,233/01 CREATION OF ANTT ECONOMIC EQUATION OF CONCESSION THE POSITIVE CYCLE OF CONCESSIONS REMUNERATION OF GOVERNMENT FOR THE GRANT AND TAXES. ENTRADAS TARIFF REVENUES FROM TOLL BOOTHS. INVESTMENTS AND OPERATIONAL COSTS. FINANCIAL COSTS AND PROFIT. RECEIPTS ACCESSORIES SCENARIO ANNUAL REPORT 2017

13 THE POSITIVE CYCLE OF CONCESSIONS INCENTIVE FOR TECHNICAL PROJECTS OF QUALITY GUARANTEE OF MAINTENANCE OF CONTRACTS ALREADY CONFIRMED TRANSPARENCY AND OBJECTIVITY THE RULES OF RENOVATION ADEQUACY OF RULES AND MODELING OF THE NEW CONCESSIONS TO THE PROFILE OF INFRASTRUCTURE LEGAL SECURITY, GUARANTEE OF INVESTMENTS AND QUALITY SERVICE HIGHWAYS CONCEDED COMFORT AND SAFETY ON JOURNEYS SERVICES OF QUALITY INVESTMENTS DEVELOPMENT OF THE CITIES ANNUAL REPORT SCENARIO 13

14 POSITIVE CYCLE OF TOLLS MORE RESOURCES COLLECTION OF ISSQN ECONOMIC DEVELOPMENT EMPLOYMENT/ INCOME CULTURE AND SOCIAL DEVELOPMENT REGIONAL INVESTMENT CONCESSION IN SÂO PAULO: USER BENEFITS At the end of 2016, a decree was signed authorizing the opening of bids for the concession for the development of the road system of the state of São Paulo. The model brings some contractual innovations, such as, ordinary revisions of the contracts every 4 years, to readjust the investment plans, insurance plans, guarantees and performance indicators. The winner will be the one that offers to bestow the greatest value to the State. It is estimated that over the 30 years of the concession, R$3.9 billion will be invested. USER BENEFITS Variable toll rate according to the time and movement of the highway; Wi-Fi connection throughout the course of conceded lanes; 19% reduction in the value of existing toll rates; 5% discount for those who use the electronic toll payment mode SCENARIO ANNUAL REPORT 2017

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16 THE CONCESSIONS SECTOR IN NUMBERS 19,678 KM ROAD NETWORK CONCEDED 9.24% 212,886 KM NATIONAL PAVED ROAD NETWORK OF HIGHWAYS PAVED IN BRAZIL ABCR 58 R$ 81 Billion In operating expenses since 1995 (values adjusted by the IPCA for 2017) R$ 97 Billion Investidos desde 1995 (valores corrigidos pelo IPCA para 2017) 20 FEDERAL ASSOCIATED CONCESSIONARIES 36 STATE 2 MUNICIPAL 46 Thousand Jobs direct and indirect generated in 2017 R$ 20 Billion To be invested until 2021 in the federal concessions SCENARIO ANNUAL REPORT 2017

17 EFFICIENT SERVICE ATTENDANCE TO THE PUBLIC MILLION VEHICLES attended each day by the support of concessionaires ATTENDANCES mechanics and medical performed by the hour VEHICLES VEHICLES RECOVERED BY TOW TRUCK every 2 minutes OPERATIONAL VEHICLE every 7 km of highway VEHICLES ATTENDED per minute for mechanical assistance ENVIRONMENT 2,600 (EQUIVALENT TO OVER 900 MARACANÁ STADIUMS) GREEN SPACE HECTARES RECOVERED OR PRESERVED REDUCTION OF 17.65% N THE DEATH RATE IN ACCIDENTS OVER THE LAST FIVE YEARS (2012 A 2017) OPERATION OPERATIONAL VEHICLES inspection vehicles and others. USER ATTENDANCE BASES 897 4, TV CAMERAS 675 TOW TRUCKS 478 AMBULANCES ANNUAL REPORT SCENARIO 17

18 ABCR AGENDA ABCR AGENDA ANNUAL REPORT 2017

19 FOCUS ON THE DEFENSE OF THE MODEL OF CONCESSIONS Throughout the year 2017, ABCR put into practice its strategic agenda, with the objective of increasing dialogue with the government, regulatory agencies, control bodies, legislators and the judiciary, contributing with suggestions for federal legislation as well as in relation to regulations. In parallel, ABCR reiterated the representativeness of the sector in the better economic performance and financials of the highway concession contracts. The agenda was conceived and deliberated by the Board of Directors of ABCR and was guided by the most relevant and latent demands of the sector in The main difficulties of the sector were the losses incurred by federal concessionaires, whose contracts, which are in the final stages, did not facilitate new investments or confront the problems in third stage contracts. 1 FEDERAL GOVERNMENT The year 2017 had two important movements from the point of view of the processing of projects related to the concessions sector. ABCR has acted more intensively for at least two years in public discussions with regard to MP which became Law 13,488/17 - and MP 800, with the aim of raising relevant issues for the concessions sector, with a focus on the equilibrium of contracts and investment catalysis. ABCR dedicated itself to the discussion of MP 752 and obtained recognition by official authority of the necessity of an action that would mitigate the problems faced by federal concessionaires. Between January and December, 38 audiences were held with ministers, secretaries, parliamentarians and other representatives of the legislative house in Brasilia. In March, the CEO of ABCR, Cesar Borges, presented to the President of the Republic, Michel Temer, the industry s claims about the importance of seeking improvements in federal concession contracts of the 3rd Stage. In addition, the Association maintained a channel of dialogue with the main representatives of the federal government - ANTT, TCU and National Congress. ANNUAL REPORT 2017 ABCR AGENDA 19

20 Meeting with Mauricio Quintella Lessa, Minister of Transport, Ports and Civil Aviation Meeting with Eliseu Padilha, Chief Minister of the Civil House MP 800 As a result of the approval of Law 13,488/17, the government issued a new provisional measure to effectively meet the needs of the 3rd Stage concessionaires. As a result, in August an inter-ministerial commission was formed involving the Ministry of Transport, Civil House and PPI, which carried out a study on the subject and issued MP 800, after approval by the Joint Committee of the National Congress, which reviews the terms of the contracts of concession. ABCR demanded the application of MP 800, which would make it possible for the resumption of the sector, as much as, the adjustment of the toll rate by a rebalancing discount; dual carriage ways with criteria for the largest need of traffic; rescheduling of investment up to 14 years from the signature of the initial contract - measures that would contribute to the economic balancing of the contracts. Failure to apply MP 800 may have consequences such as the return of five federal concessions from the 3rd Stage, leaving only the friendly return option,with unpredictable results for bidding and investment deadlines and the estimate of R$12 billion not invested. 2 DIALOGUE WITH THE TCU ABCR had as one of its objectives for 2017 to promote greater approximation with the Audit Court of the Union (TCU). Seeking constant dialogue to bring clarification and information on the sector to the ministers and the technical staff of the control body. As a result, the association carried out a frequent agenda of meetings with ministers of TCU, who also received a memorandum with the main issues relating to the jurisdiction of the court in the context of the road concessions program. 20 ABCR AGENDA ANNUAL REPORT 2017

21 Meeting with Blairo Maggi, Minister of Agriculture, Livestock and Farming Meeting with Raimundo Carreiro, Minister from TCU 3 STRENGTHENING OF THE PAULISTA MODEL ABCR intensified the dialogue with representatives of the São Paulo government, with the objective of reiterating the support for the relevance of the model of state concessions - meetings took place with the governor and deputy governor, as well as the Secretary of Transportation and the board of ARTESP, the transportation agency of the state of São Paulo. ABCR CODE OF CONDUCT ABCR has strengthened its environment of control and anti-corruption by revising its Code of Conduct and the launching of the Ethics Channel, based on the best practice of the market. The Ethics Channel is an Internet portal which serves as a platform for employees and the public to report misconduct, which are classified by an outsourced and independent company, to be analyzed afterwards by the Ethics Committee. It is important to point out that since 1996, when it was founded, ABCR advocates ethics in its relations with the market, with associates and with the governing authority. The Code is available on the website of ABCR ANNUAL REPORT 2017 ABCR AGENDA 21

22 BALANCE OF OPERATION IN 2017 PARTICIPATION IN 87 MEETINGS WITH REPRESENTATIVES the first step of the governments, regulatory agencies, control bodies and parliaments, federal and state. PRESS AND MEDIA PUBLISHED ARTICLES - CITING ABCR ,032 2,116 2, MEETINGS AND DEBATES presentation of the key messages of the sector. POSITIONING IN 876 MATTERS IN THE PRESS in 2,426 matters cited the Association: index 15% higher than EFFECTIVE PARTICIPATION IN 30 FORUMS AND EVENTS about the sector of concessions and logistics. THREE IMPORTANT FRONTS WERE FORWARDED FOR 2018: Advances in federal contracts, involving the regulation of the law 13,448 / 17 and the approval of MP 800 by the Commission of National Congress; Beginning of a continuous dialogue with TCU; Progress in discussions with the authorities of the states of São Paulo and Paraná. RESOLUTION CONTRAN 640 ABCR has been acting firmly in the debate against the measure, that increases the weight limit of sugarcane trucks on highways, through communication and dialogue with the government and the population. It s a measure that could bring about safety impacts on account of the increase in wear of the road surface, because of the weight of the trucks that would circulate the roads. 22 ABCR AGENDA ANNUAL REPORT 2017

23 REGIONAL FORCE: ABCR OFFICES ABCR has subsidiaries in Brasilia and Curitiba to provide the necessary support in the promotion of the concession model within the states, and in parallel, contribute more assertively to opinion about the Association, by the extension of dialogue with the public entities, representatives of each State. FEDERAL DISTRICT ABCR in Brasilia sought dialogue with the National Congress, the Ministries of Transport and Planning and ANTT, independently or in conjunction with national entities representatives, such as the national confederations of industry (CNI), Agriculture (CNA) and Transport (CNT). The office as well sent representatives to public hearings in the legislative house, as well as identifying and monitoring the progress of 200 legislative proposals of interest to the highway concessions sector in the pipeline in Congress in the period covered by this report. Among the topics are; toll exemptions, road areas, reprogramming of investments, rebidding, exclusive lanes for motorcycles, public lighting, expropriation and road safety, among others. In addition, ABCR-DF follows the processes of interest in the TCU and the procedural progress of legal actions that are the responsibility of the Association. ABCR PARANÁ/SANTA CATARINA The ABCR office in Curitiba represents the Association in the States of Paraná and Santa Catarina, carrying out the forthcoming work and defending the sector with governments and regulatory agencies which manage the concession contracts of state and federal concessionaires. ABCR has 48 appointments with public bodies, local authorities and entities to discuss and resolve issues on the agenda in in the case of the Roads Department (DER-PR), the Regulatory Agency of Paraná (AGEPAR), the government of the State of Paraná, Federal and State Highway Police, Environmental Institute of Paraná, Federation of Cargo Transport Companies of PR (Fetranspar), Institute of Engineering, Public Security Secretariat, among others. INVOICES AT TOLL BOOTHS: THE CONQUEST OF ABCR In partnership with the Federal Revenue Service, ABCR contributed to the definition of implementation of the Normative Instructions (INs) 1731 and 1738, respectively, of September and November 2017, which establishes the obligation to issue an invoice by highway concessionaires. The regulations came into force in December 2017 and, since January 1, 2018, every user of toll roads can emit a tax document through the Internet, according to the INs of the Receipt Federal. The new service is offered by the 58 highway concessionaires that operate in 12 states in Brazil and represents another documentation option of available to users. The Equivalent Tax Document - DFE that is currently delivered at the toll booths is enough for the provision of expense accounts. Now, users are able to access the website of each concessionaire, where they can issue an equivalent tax document. ANNUAL REPORT 2017 ABCR AGENDA 23

24 HAVE BEEN TWO DECADES WORKING FOR BRAZIL The Brazilian Association of Highway Concessionaires (ABCR) was born in São Paulo in 1996, as the entity that represents the highway concession sector in Brazil. Headquartered in São Paulo (SP) and with regional offices in Brasília (DF) and Curitiba (PR). ABCR has been making relevant contributions to the institutionalization of the sector in the country, because it believes in the efficiency of the concession model, based on pillars such as transparency, planning, incentive policies increasingly balanced and appropriate mechanisms for regulation and control. ABCR also holds, every two years, the ABCR Congress and BRASVIAS to stimulate the debate of the strategic themes of the sector and to present innovations in technology, safety and engineering for highways. The next one will take place in MISSION OF THE SECTOR AND ABCR S OBJECTIVES MISSION OF THE SECTOR OFFER HIGHWAYS IN ADEQUATE CONDITIONS OF SAFETY, FLUIDITY AND COMFORT FOR USERS AND FOR THE DISCHARGE OF NATIONAL PRODUCTION. ABCR S OBJECTIVES DEFEND THE INTERESTS of the associates in a way which is compatible with the national interest. PROMOTE HARMONY of relations between the associates and of those with official authority. ENCOURAGE AND COLLABORATE for technological advancement and operations of associates. PROVIDE GUIDANCE to the associates with regard to the interpretation of legal issues and taxation. PROMOTE EXCHANGE with foreign business associations with similar objectives and with public agencies of finance, national and international. ESTABLISH COORDINATED ACTIONS with other entities of class mainly concessionaires of public services for the consolidation of business objectives. 24 ABCR AGENDA ANNUAL REPORT 2017

25 CONCESSIONARIES ASSOCIATED IN 2017 MT ROTA DO OESTE MORRO DA MESA GO CONCEBRA MGO RODOVIAS VIA 040 PE ROTA DOS COQUEIROS ROTA DO ATLÂNTICO BA BAHIA NORTE CLN VIABAHIA MS MSVIA PR CAMINHOS DO PARANÁ ECOCATARATAS ECONORTE ECOVIA AUTOPISTA PLANALTO SUL AUTOPISTA LITORAL SUL RODONORTE RÉGIS BITTENCOURT VIAPAR RJ ECO 101 RODOSOL AUTOPISTA FLUMINENSE CONCER CRT LAMSA NOVADUTRA SP ES MG CONCER AUTOPISTA FERNÃO DIAS AB NASCENTES DAS GERAIS VIA 040 MGO RODOVIAS CONCEBRA ECOPONTE RODOVIA DO AÇO ROTA 116 VIALAGOS VIARIO SC AUTOPISTA LITORAL SUL AUTOPISTA PLANALTO SUL RS CONCEPA ECOSUL AUTOBAN AUTOPISTA RÉGIS BITTENCOURT AUTOPISTA FERNÃO DIAS AUTOVIAS CART CENTROVIAS AB COLINAS ECOPISTAS ECOVIAS ENTREVIAS INTERVIAS NOVADUTRA RENOVIAS RODOANEL OESTE RODOVIAS DO TIETÊ ROTA DAS BANDEIRAS SPMAR SPVIAS TAMOIOS TEBE TRANSBRASILIANA AB TRIÂNGULO DO SOL VIANORTE VIAOESTE VIARONDON ANNUAL REPORT 2017 ABCR AGENDA 25

26 LOREM ABCR IPSUM LIOR CONGRESS ABCR CONGRESS 2017 ANNUAL REPORT 2017

27 ABCR 10 TH CONGRESS FORUM FOR DEBATE AND DEFENSE OF THE CONCESSIONS MODEL In the 2017 edition, the Brazilian Congress of Highways and Concessions reached its 10 th edition by promoting the discussion of critical issues for the continuity of road concessions in Brazil and the updating of Brazil s infrastructure, the challenges and regulatory frameworks, as well as the opportunity to learn about new solutions utilized in road operations and works. Every two years, the event brings together representatives of concessionaire companies associated with ABCR, suppliers of products, service providers, regulatory agencies, governing bodies (in three spheres), teachers and students from the main universities of Brazil and abroad. The focus is on the constant improvement of infrastructure, especially in promoting the concessions model. STUDY ON STRATEGIC LOGISTIC CORRIDORS During the ABCR Congress, a study was presented that was developed by the Ministry of Transport, Ports and Civil Aviation, on Strategic Logistic Corridors. Unpublished in Brazil, the survey s objective is to establish a diagnosis of the current state of the infrastructure of transport, focused mainly on the identification of logistic corridors for the flow of grain in a country that has reached record harvests. The estimate for 2016/2017 is to reap 238.7million tons, an increase of 27.9% in relation to the of the previous biennium, according to data from the National Supply Company (Conab). The flow of production by corridors adequate and efficient enables greater competitiveness of Brazilian products in the global market. As well as enhancing the transportation of products to the regions of domestic consumption, in addition to contributing to the sustainable development of the country. ANNUAL REPORT 2017 ABCR CONGRESS

28 Representatives of public agencies, senators, deputies, analysts and executives of the concessionaires discussed the challenges of the highway modal during the 10th Brazilian Congress of Highways and Concessions, bringing together the public and private sectors in search of solutions. FEATURED PANELS The discussion panels dissected topics on the effectiveness of infrastructure planning, financing of road concession programs, the role of the control bodies, the role of the judiciary in the evolution of jurisprudence involving the highways concessions sector, and the performance of the National Congress and control bodies in relation to the theme. EFFECTIVENESS IN INFRASTRUCTURE PLANNING The theme involved the discussion on the models of integration of transport modes, still underdeveloped in Brazil. Marco Aurelio Barcelos, Deputy Secretary of the Special Secretariat of the Investment Partnership Program (PPI), recalled that the main proposals for regulatory changes for all modes began in the highway sector, due to its irradiating power and its importance. The Secretary for Infrastructure Development at the Ministry of Planning, Hailton Madureira, highlighted the fiscal challenges of Brazil and that the concession is the solution. But, the integration of public agencies in planning is still lacking. Intermodality in the planning stage is still a difficulty to be overcome, in the view of Valter Casimiro, Director General of the National Department of Transport Infrastructure (DNIT). In his speech, he pointed out difficulties in overcoming bureaucratic barriers, in order to balance the responsibility of the budget between the government and the Ministry of Transport. 28 ABCR CONGRESS 2017 ANNUAL REPORT 2017

29 Paulo Tarso Vilela Resende, professor at the Dom Cabral Foundation, criticized Brazilian bureaucracy, which interferes in the concession process and the Vice President of Institutional Relations of the concessionaire CCR, Ricardo Castanheira, acknowledged that the sector lives on emergency investment plans, which does not solve sensitive issues. Finally, Cláudio Graef, Managing Partner of the Berkeley Research Group, analyzed the criteria used for the choice of companies in public auctions and the lack of intermodal plans since the concession planning phase. FINANCE OF THE HIGHWAY CONCESSION PROGRAMS Representatives from the financial sector discussed the way for the financing of concessions: promoting infrastructure or market rules, models of success in other countries and how to ensure attractive returns for national and international investors. Edson Nobuo Ogawa, Project Finance Director at Bank of Santander, pointed out that with the reduction of BNDES financing, the action of private banks becomes very important. For Zeina Latif, chief economist at XP Investments, BNDES is essential for financing, but it is necessary to review the model and seek the reduction of risks to attract the interest of international investors, a theme that was also reinforced by Fabiano Fontes, from the Bank of Brazil. The risk of judicialization was the subject of greater concern for the executive director of Sanitation, Infrastructure and Business of the board of the bank, Caixa Econômica Federal, Antônio Gil Padilha Bernardes Silveira. Performance bond practice would bring strength and resilience to projects of the sector, in the vision of Cleverson Aroeira da Silva, head of the Transportation and Logistics Department of BNDES. The planning of the concession projects was one of the issues most discussed at the Congress, and reinforced from the point of view of perenniality and focus on the private investor in all stages of modeling of the concession. ANNUAL REPORT 2017 ABCR CONGRESS

30 ROLE OF CONTROL BODIES IN THE HIGHWAY CONCESSION SECTOR The topic was discussed by members of control bodies, jurists and consultants who analyzed the roles of trustees, regulatory agencies and control bodies of the sector. The TCU minister, Bruno Dantas, provided a diagnosis of the current situation, underscoring the serious fiscal crisis, which does not allow the public sector to make investments in the infrastructure sector. He argued that caution was needed on the part of TCU for the sanctions not to cause a blackout in the sector. The Counsellor of the Court of Audit of Paraná, Fernando Augusto Guimarães, brought suggestions for concessions such as the application of shared audits, with diverse bodies and varied knowledge; and the collection of quality information so that the actors can use their skills effectively. Economist Raul Velloso, of the National Institute of Higher Studies, found that the projection of the investment cut from 2014 to 2018 is 71%. In the State of São Paulo, the projection is 50% in real terms. According to him, the country is going through a serious situation in the area of investments that should receive more attention. The lawyer Arthur Guedes argued that the control bodies overlap regulatory agencies, which may weaken legal certainty in the sector. RESPONSIBILITY OF CONGRESS AND REGULATION OF CONCESSIONS The two themes were the highlight of the panels that closed the ABCR Congress. With the participation of attendees, questions were raised about how the present legislation avoids negative effects for the government, concessionaires and users; how to advance in the User Code and how to protect the public administrator for decisions of good faith. In the last panel, the regulation of highway concessions; short and medium-term challenges were discussed by representatives of regulatory agencies which dealt with how to guarantee quality standards and technological evolution in order to offer better services to the user and how to guarantee the legal security of contracts and exposure to investment risk. Access to Congressional Videos: tinyurl.com/abcr ABCR CONGRESS 2017 ABCR CONGRESS 2017

31 ABCR CONGRESS 2017 ABCR CONGRESS

32 OPERATING CONCESSIONAIRES OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

33 The 58 associated companies of ABCR are aware of their role for promoting the country s sustainable development and even in a political and regulatory scenario that does little to stimulate investment, have directed efforts to ensure the quality of the highways that they administer, at the federal, state or municipal levels. Over R$ 97 billion has been injected into works and more than R$ 81 billion in maintenance, since the beginning of the Program of Concessions in Also, 46 thousand direct and indirect jobs have been generated. With adequate infrastructure, Brazilian production is strengthened, with the ability to reduce costs, with more competitive prices for products and greater economic development. RETURNS TO THE USER IN BILLION R$ 2.38 BILLION TRANSFERRED OF ISSQN TO THE MUNICIPALITIES NEAR TO THE CONCESSION HIGHWAYS IN FEDERAL TAXES 2,335, ATTENDED VEHICLES (EMPTY FUEL TANKS, ELECTRIC AND MECHANICAL, RECOVERY BY TOW TRUCK AND TIRE CHANGES) ACCIDENTS ATTENDED WITH DANGEROUS PRODUCTS 144,298 79,185 SIMPLE FIRST AID WITHOUT REMOVAL FIRST AID WITH RESCUE BY AMBULANCE 223,483 ATTENDED PRE-HOSPITAL ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 33

34 USE OF RESOURCES Maintenance works and improvements such as dual carriageways, new lanes / stretches, signs, road surfacing, footbridges, crossings, accesses, boundaries and special engineering projects. Attended services: medical assistance, mechanical repair and recovery by tow truck, among others, that guarantee the safety and comfort of the user. Communication campaigns focused on raising awareness and motivating drivers in order to maintain safe road practices, as well as health education and environmental education. Operational Control Centers: rooms with monitors that transmit, in real time, the images of cameras installed on the highways and other monitoring instruments such as data from highway weather stations, traffic counts and the service of highway emergency telephones. 34 OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

35 BIG NUMBERS OF CONCESSIONS SERIES OF HISTORICAL INVESTMENTS In R$ million ,004 5,407 5,483 6,320 6,911 6,975 6,662 6,746 6, , , FINANCIAL DATA STATISTICS In % In Km Investments Federal - 20 Concessionaires 34 9,355 Operational Expenses Financial Expenses 28 São Paulo - 21 Concessionaires 6,663 Taxes Paraná - 6 Concessionaires 2,502 Payments to Governments PE / BA / ES / MG / RJ - 11 Concessionaires 4 1, ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 35

36 TRAFFIC THROUGH TOLL BOOTHS 1,800,000,000 1,600,000,000 1,400,000,000 1,200,000,000 1,000,000, ,000, ,000, ,000, ,000, TRANSFER OF TAX Concessionaires transferred R$ billion to municipalities bordering the highways in 2017 in ISSQN (Tax on Services of Any Nature), and R$ 2,38 billion to the federal government, according to a survey conducted by ABCR. The transfer is destined for the municipalities that are traversed by the stretches administered by the concessionaires. The resource is invested in improving infrastructure and contributing to local development. In practice, the concession model brings new revenue for the municipalities, making viable investment in health, education, sports and works in the surrounding regions. The collection conforms to highway construction in the jurisdiction of each municipality. 36 OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

37 1,737 km 3,277 km AB COLINAS AB NASCENTES DAS GERAIS - PPP RODOVIAS DO TIETÊ AB TRIÂNGULO DO SOL AUTOPISTA FERNÃO DIAS AUTOPISTA FLUMINENSE AUTOPISTA LITORAL SUL AUTOPISTA PLANALTO SUL AUTOPISTA RÉGIS BITTENCOURT AUTOVIAS CENTROVIAS INTERVIAS VIANORTE 2,896 km CCR NOVA DUTRA CCR AUTOBAN CCR SPVIAS CCR VIAOESTE CCR VIALAGOS CCR MSVIA CCR RODONORTE CCR RODOANEL 1,902 km ECOSUL ECOVIAS ECOPISTAS ECOVIA ECOCATARATAS ECO 101 ECOPONTE 2,005 km CART LAMSA CLN VIA 040 1,141 km ROTA DAS BANDEIRAS ROTA DOS COQUEIROS - PPP ROTA DO OESTE CONSÓRCIOS INDIVIDUAIS 2,143 km 657 km 3,920 km TRIUNFO CONCEBRA TRIUNFO CONCEPA TRIUNFO ECONORTE TRIUNFO TRANSBRASILIANA CONCER VIARIO RENOVIAS BAHIA NORTE ROTA DO ATLÂNTICO CRT VIARONDON CAMINHOS DO PARANÁ RODOSOL RODOVIA DO AÇO ROTA 116 TEBE VIABAHIA VIAPAR MGO RODOVIAS MORRO DA MESA SPMAR TAMOIOS ENTREVIAS ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 37

38 1,737 KM AB COLINAS AB NASCENTES DAS GERAIS - PPP RODOVIAS DO TIETÊ AB TRIÂNGULO DO SOL Created in 2012, AB Concessões is today one of the largest highway concession companies in Brazil, incorporating into its portfolio the entrepreneurial capabilities, traditions and visions of one of the largest highway concessions groups in the worldthe Italian Atlantia. Positioned among the leaders of Brazil in the sector, AB Concessões manages more than 1,500 kilometers of roads through its concessionaires: AB Triângulo do Sol, AB Colinas e Rodovias do Tietê (50%), in the State of São Paulo and AB Nascentes das Gerais, in Minas Gerais. With privileged strategic location, the AB Concessões highways are essential for the economy and social development of the regions crossed or served by them. ALMOST 80 MILLION IN INVESTMENTS The four concessionaires maintain a permanent program of technological improvements and technical maintenance on their highways. In 2017, for example, AB Colinas - with consolidated annual traffic of 36,990,542 vehicles - invested approximately R$ 77 million in dual carriageways, among other works. AB Triângulo do Sol invested around R$114.5 million throughout the year. The implementation of the Optical Character Recognition (OCR) system on all automatic collection lanes, which reduced incidents of accidents and the loss of revenues for the concessionaire, was one of the technological advances on the highways managed by AB Concessões in OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

39 SUSTAINABLE ACTIONS The four companies also invest heavily in programs and initiatives of environmental protection, such as adherence to awareness-raising projects held on the Day of Water, Environment Week, Tree Day and Fauna Day, for example, as well as prevention of dengue, through the elimination of possible mosquito outbreaks along their highways. AB Nascente das Gerais has recovered or preserved riparian forests on hectares, Project SOS São Francisco. RECOGNITION OF HIGHLIGHTS IN 2017 All the highways administered by AB Colinas were among the 20 best nationally, based on the criteria assessed in the ranking of highways by the National Transportation Confederation (CNT). On the list, SP-075, administered by the concessionaire on the stretch from Itu to Campinas, occupies eighth place. The Rodovia Presidente Castello Branco (SP-280), on the stretch connecting Itu to Tatuí, was in ninth position. ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 39

40 3,605.8 KM* AUTOPISTA FERNÃO DIAS AUTOPISTA FLUMINENSE AUTOPISTA LITORAL SUL AUTOPISTA PLANALTO SUL AUTOPISTA RÉGIS BITTENCOURT AUTOVIAS CENTROVIAS INTERVIAS VIAPAULISTA VIANORTE One of the largest companies in the Brazilian highway concessions sector in kilometers administered (3,708.7 kilometers), Arteris links the south and south eastern regions of the country through its four state concessionaires (Autovias, Centrovias, Intervias and Vianorte) and five federal concessionaires (Fernão Dias, Régis Bittencourt, Fluminense, Litoral Sul e Planalto Sul). In 2017, the company was responsible for one of the largest road construction projects in the last decades: the conclusion of the complex Serra do Café, on the Regis Bittencourt highway, which required four tunnels and 39 viaducts. *Total of the controlled extension. DUAL CARRIAGEWAY CONSTRUCTION OF SERRA DO CAFEZAL In the roadworks package undertaken by Autovias in 2017, none stands out more than the conclusion of Serra do Cafezal, on Régis Bittencourt, between the states of São Paulo and Paraná. The principal works of the concessionaire Autopista Régis Bittencourt, the dual carriageway construction increases exponentially highway safety and was completed on 19th December 2017, with the start of the full operation on its 30.5 kilometers. Following best international practices, the concessionaire included, in the dual carriageway works, the construction of an emergency pedestrian crossing in the tunnel of the largest extension on the new stretch, to give users more security and an escape route in case of accidents or unforeseen circumstances. In Brazil, this type of escape route is not mandatory for tunnels less than a kilometer in length, but, nevertheless, the Arteris Group decided to build it as an extra precaution with the safety of users in mind. In fact, the four tunnels constructed on Serra do Cafezal have a modern automation and security system that includes ventilation, lighting, a fire prevention and mitigation system, intelligent drainage of flammable fluids and communication devices such as call boxes and loud speakers. 40 OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

41 DECADE OF ACTION FOR ROAD SAFETY Arteris joined the Decade of Action for Road Safety , a United Nations (UN) iniciative to prevent traffic accidents the third leading cause of death in the 30 to 44 age bracket in the world, with Brazil the fifth among the countries with the highest traffic fatalities. To do so, the company has set itself the goal of halving the fatalities in its concessions, considering the periods from 2010 to With investments in the concessions and several initiatives undertaken, since 2010 there have been average reductions of 12% in accidents and 36 % in fatalities. The highlights of the period were in the Fluminense concessionaires - with 60% reduction of deaths after delivery of dual carriageway, lighting and signaling improvements in overtaking stretches -, Planalto Sul, also 60%, and Régis Bittencourt, with more than 57% reduction. These three among all the Group s concessionaires have already met the goal of 50% reduction in fatalities. 21 ST CNT RODOVIAS RESEARCH The study, which was carried out by the National Transportation Confederation (CNT), in 2017, highlighted areas managed by Centrovias, Autovias, Intervias, Vianorte and Litoral Sul among the top 20 in Brazil, SP-225 (Centrovias) being ranked third best in the country. RODOVIA DOS CALÇADOS Landmark of the year in 2017 was the winning auction of Rodovia dos Calçados (Itaporanga- Franca), a 720-kilometer stretch in the State of São Paulo, which passes through 35 municipalities in the regions of Franca, Batatais, Ribeirão Preto, Araraquara, São Carlos, Jaú, Barra Bonita and Itaí. The new lot includes the 317 kilometers currently managed by Autovias, the Group s concessionaire, which since 1998 has been operating in Ribeirão Preto and the region, as well as another 403 kilometers that were under direct management by the state government. The investment plan is about R $ 5 billion over 30 years. ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 41

42 2,896 KM CCR NOVADUTRA CCR AUTOBAN CCR SPVIAS CCR VIAOESTE CCR VIALAGOS CCR MSVIA CCR RODONORTE CCR RODOANEL With operations since 1999 in the segments of; highway concessions urban mobility, airports and services. CCR Group is responsible for 2,908 kilometers of the national concession highway network, in the States of São Paulo, Rio de Janeiro, Paraná and Mato Grosso do Sul. It s one of the largest infrastructure concession companies in the world - and this can be proved by the strategic importance of its concessions to the national road network, especially in the southeast region. Under the control of the CCR Group, the company manages the concessionaires; NovaDutra (SP-RJ), CCR ViaLagos (Rio de Janeiro- Lagos Region), CCR RodoNorte (four segments between São Paulo and Paraná), CCR AutoBAn (316 kilometers of the Anhanguera- Bandeirantes System), CCR ViaOeste (170 kilometers of the Castello Branco and Raposo Tavares highways), CCR RodoAnel (29 kilometers of the western stretch of the Rodoanel Mario Covas, which interconnects Raposo Tavares. Castello Branco, Anhanguera, Bandeirantes and Régis Bittencourt), CCR SPVias (516 kilometers which serve 26 municipalities, the main link between the city of São Paulo to the southwest of the State, Paraná and Mato Grosso do Sul) and CCR MSVia (854 kilometers crossing the state of Mato Grosso do Sul). Committed to sustainable development, CCR signed the UN Global Pact. In 2014, the CCR Institute was created, to structure the management of the social, cultural, environmental and sports projects, supported for more than ten years, by the company. YEAR OF INVESTMENTS AGAINST THE CRISIS Contra to the crisis, all eight concessions of the CCR Group, allocated resources in 2017 to increase the safety and practicality of their roads. It was one of the biggest investments in the history of road concessions: nearly R$ 1.5 billion applied in improving highways administered by the group On its own, CCR RodoNorte invested R$ 362,043,389 in the completion of the Apucarana road junction, in addition to the liberation of traffic to dual carriageways on the BR-376 between Apucarana and California, dual carriageway construction on BR-376 (Ponta Grossa - Apucarana) and PR-151 (Piraí do Sul -Jaguariaíva). CCR MSVia allocated around R$ 340 million to dual carriageway construction on BR-163 / MS. CCR NovaDutra invested 42 OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

43 more than R$ 32 million on the modernization of bridges and viaducts, implementation of footbridges (initial phase), improvements in traffic flow, safety and improvement of interchanges and access roads: there will be 18 footbridges along the highway, as well as the deployment of 57 kilometers of anti-reflective screens, aimed at improving pedestrian crossing conditions and road safety. EUROPEAN TECHNOLOGY CCR RodoAnel innovated in the area of safety by importing from Slovenia, so-called, Catch Bags - devices composed of pneumatic cushions that are positioned under heavy vehicles that have overturned, such as buses and trucks. When the device inflates, it raises the vehicle by its side. In addition, another set of cushions, already inflated, is placed underneath the vehicle s wheels to return it to the correct position smoothly. SOCIAL RESPONSIBILITY A flagship of the CCR Group is the engagement in sustainability projects and social actions in the areas that surround the highways. CCR AutoBAn promoted the campaigns; Safe Crossing and Responsible Care of Animals and Dangerous Goods. With the aim of reducing the number of collisions with pedestrians and deaths on the Anhanguera-Bandeirantes highway system, by raising awareness of pedestrians on the safest ways to cross the highway. In total,53,680 leaflets were distributed in The Fog campaign was aimed at guiding drivers on defensive and preventative driving techniques on foggy days. CHILDHOOD CAMPAIGN: FOR CHILDREN The 18th May is marked as the National Day to Combat Sexual Abuse and Exploitation against children and adolescents. CCR SPVias, in partnership with the CCR Institute, is a signatory to the Business Pact against the Sexual Exploitation of Children and Adolescents on Brazilian Highways, supporting the Childhood Foundation through the On the Right Hand Program - which aims toto alert and generate effective solutions to prevent and combat the sexual exploitation of children and adolescents on Brazilian highways. CCR SPVias, in partnership with the City Council of Tatuí, participated in an awareness raising action in Praça da Matriz, and a march on 18th May Warning leaflets at toll plazas were also distributed. ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 43

44 1,902 KM ECOSUL ECOVIAS ECOPISTAS ECOVIA ECOCATARATAS ECO 101 ECOPONTE EcoRodovias is one of the principal infrastructure companies in Brazil, with about four thousand employees, seven highway concessions, besides a logistics unit in Cubatão and a port terminal at the port of Santos. Managing more than 1.7 thousand kilometers - including the Anchieta-Imigrantes System, through the concessionaire Ecovias, and the Espírito Santo stretch of the BR-101, which connects Rio to Bahia. FOCUS ON IMPROVEMENTS In 2017, the concessionaire invested R$ 58 million on improvements, such as dual carriageways, implementation of margins and installation of footbridges. The highways of EcoRodovias have one of the best technical assistance services in the country. In 2017, only Ecovias, for example, attended to 30,455 vehicles - for empty fuel tanks, electric or mechanical breakdowns, tow truck removals and changes of tires. And no less than 6,516 users received pre-hospital care, with 1,479 rescued by ambulance. The group, as its name suggests, gives much emphasis to socioenvironmental actions and projects in the areas served by all its concessions. TOP OF SUSTAINABILITY In 2017 the EcoRodovias Group received, for the second time, the award TOP for Sustainability from the Association of Directors of Sales and Marketing of Brazil (ADVB). The award recognizes companies that promote social welfare as part of their business. Another recognition was the Época Negócios 360º prize, which highlights EcoRodovias Group as the best infrastructure company in Brazil. This is the third time that the company has occupied the highest position in the category, the other times they achieved this, were in 2012 and The result is based on analyzes of the financial aspects of companies, HR practices, ability to innovate, social and environmental responsibility, corporate governance and future visions. It should be noted, that the Group maintains a place in the Corporate Sustainability Index (ISE) of BM & F Bovespa. 44 OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

45 REINVENT PROJECT The project came into being in March 2010 and allows seamstresses from underprivileged communities to transform canvas that was used in advertising into craft products. In addition to helping the environment, this initiative also brings work and income to seamstresses from communities who are part of the Reinvent Project. In 2015, the project of Ecocataratas served as an example for the creation of a similar project in Rio Grande do Sul, promoted by the Ecosul concession. ROAD FOR PROFESSIONAL TRAINING Projeto que visa capacitar a comunidade próxima às rodovias de concessão a ingressar no mercado de trabalho. Em parceria com o SESI/SENAI e a Igreja do Evangelho Quadrangular, a Ecovia fez a comunicação entre os órgãos envolvidos, bem como organizou o evento, oferecendo lanche, material de incentivo à continuidade dos estudos no final do curso, cerimônia de formatura, divulgação e captação de alunos. Nesse tempo de preparação, a Igreja cedeu espaço para a realização das aulas e o SESI/SENAI arcou com material didático e professores capacitados. Cerca de 35 moradores foram matriculados e, desses, 30 foram aprovados em ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 45

46 2,005 KM CART LAMSA CLN VIA 040 The Brazilian group brings together 11 concessions of public services in the areas of: Highways, Airports and Urban Mobility and is deeply committed to the consciousness that the development of Brazil depends on large scale investments in the transport infrastructure. Invepar became a standard bearer in the area and is one of the largest private sector operators in Brazil. The concession CART (Concessionária Auto Raposo Tavares), in São Paulo, CLN (Concessionaire Litoral Norte), in Bahia, LAMSA (Linha Amarela), in Rio de Janeiro, and via 040, from Minas Gerais to the Federal District, are controlled by Invepar, they add up to a total of 2,005 kilometers and they registered the passage of more than 3.6 million vehicles only in the special operation at the end of Invepar also has a 24.9% stake in CRT (Concessionária Rio Teresópolis) and 33.34% in ViaRio, in Rio de Janeiro, 50% in CRA (Concessionária Rota do Atlântico) in Pernambuco, and 50% in CBN (Concessionaire Bahia Norte), in Bahia. The eight highways together total 2,336 kilometers and registered million paying equivalent vehicles (VEPs) in HIGH MOVEMENT In Rio de Janeiro, more than 43 million vehicles passed by the toll booths of LAMSA in CLN, which operates 217 kilometers of highway and connects the municipality of Lauro de Freitas, in Bahia, to the border with Sergipe, registered more than 7.5 million vehicles on the route. Via 040, the concessionaire responsible for managing the km stretch of BR-040 between Brasilia (DF) and Juiz de Fora (MG), there were more than 66.4 million vehicles during the year. Finally, CART, the Auto Raposo Tavares, Concessionaire, had more than 49.5 million equivalent paying vehicles passing through the kilometers of the highway. REDUCTION OF ACCIDENTS In 2017, the highways controlled by Invepar had a 6.4% reduction in the number of accidents compared to As a highlight, there was a 30.3% fall in animals colliding with vehicles at CART and 15.2% at CLN, influenced by new structures which allow the safe passage of fauna. At LAMSA, there was a 26% reduction in accidents with injuries and 19% in accidents where there were no injuries. At VIA040, the fall was 4.5% in total accidents, influenced by a reduction in rear collisions, which represented 29% of the total incidents on the route. 46 OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

47 20 YEARS OF LINHA AMARELA (YELLOW LINE) LAMSA, the concession that has managed the route throughout the period, has witnessed the history of development and integration of the areas which their 17.4 kilometers of highway passes through, in Rio de Janeiro. The route has boosted the development of the zones north and west of the city, which are currently the most populous, according to recent data from IBGE, with 6,498,837 inhabitants, 40% of the total of the state. But it has been the western zone that has benefited more, since its population has grown more than 20% in the period. SUSTAINABILITY IN THE DNA OF THE OPERATION The companies of the group characterize their actions of social responsibility through community relationships, private social investment and social management of the occupation of the area. The social and environmental actions of Invepar are underpinned by policies on Health, Safety and the Environment and in the policies of the Instituto Invepar. In 2017 meetings were held with leaders and community representatives to share information with users and residents who live around the highways and the LAMSA Expressway. The prevention of accidents and the preservation of life were issues addressed in campaigns and educational blitzes. The actions reinforced conceptions of road safety and raised the awareness of drivers and pedestrians to safe behaviour. As well, there were campaigns and actions to combat child labor. By educating drivers and street vendors about the dangers of irregular trade at the toll plazas. Already, in environmental programs, among the main gains, greenhouse gas emissions (GHG) were reduced by more than 30% in a year, mainly due to reduced consumption of fossil fuels such as gasoline and diesel by vehicle fleets on the highways. Instituto Invepar and its subsidiaries are participants in the Global Pact of the United Nations (UN), which prescribes the adoption of ten principles in the areas of human rights, labor relations, the environment and anti-corruption. COMPLIANCE AND INTEGRITY The companies of the Invepar group are signatories to the Business Pact for Integrity and Anti-Corruption, a partnership of the Comptroller General s Office and the Ethos Institute and other organizations, which are part of the force to improve corporate compliance. In 2017, the group completed its new Integrity Policy, establishing guidelines, which are complementary to its Code of Ethics and Conduct. To do so, it executed a robust work plan contemplating, among other elements, the publication of corporate policies, such as the Consequence Policy, in addition to having an independent denunciation reporting channel and providing training to all employees. The commitment: to develop in all aspects ethical behaviour in its operations, in addition, to handling any identified offenses. In this way, its model of Working Integrity contributes to the improvement of public-private relations and strengthens the combat against corruption while preserving the value of the company. ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 47

48 1,141 KM ROTA DAS BANDEIRAS ROTA DO OESTE ROTA DO ATLÂNTICO ROTA DOS COQUEIROS BAHIA NORTE Combined of seven concessions that manage 1,537 km of highways that cross 50 municipalities in four states - Bahia, Mato Grosso, Pernambuco and São Paulo. Participating are the concessions; Rota das Bandeiras, Rota do Oeste, Rota dos Coqueiros, Bahia Norte, Rota do Atlântico and Litoral Norte. The company has made important investments, which result in increasingly secure and comfortable journeys for users - in addition to reducing travel time and increasing productivity for the economy. SAFETY IS PRIORITY In 2017, the D. Pedro I highway - which is administered by the Rota das Bandeiras concession, that unites the Paraíba Valley to the Metropolitan Region of Campinas (RMC), one of the most productive regions in the country, in the interior of São Paulo - was voted the second best in the country by CNT. Rota das Bandeiras was also recognized as the third best concession of the year by the Transport Agency of the State of São Paulo (Artesp). Over the last eight years, the number of fatalities fell by 38%, while the number of accidents registered fell 42.2% on the roads of the Dom Pedro Corridor, under the concession of Rota das Bandeiras. RADIO ON THE ROUTE Rota das Bandeiras launched Radio Rota, a new channel of communication with contributors which serve thousands of drivers every day at the toll plazas of the Dom Pedro Corridor, in the interior of São Paulo. The 24-hour schedule gives information about the operation and security tips. It also includes guidance on staffing resources, as well as, general news bulletins and music of varying genres. BR-163: GRAIN PRODUCTION FLOW They are no less than kilometers, strategically placed to enable the flow of grain production. The BR-163, in Mato Grosso, managed by Rota do Oeste, another Odebrecht concession, is an important integrated hub of Brazil. It s the main medium for grain production in the midwest 48 OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

49 region, which accounts for 30% of national production. Almost 70% of vehicles that travel on the route are trucks. The concession has already delivered 117 kilometers of dual carriageways and, in 2017, invested in the restoration and maintenance of the road surface of the stretch. NEW FINANCING Rota dos Coqueiros renegotiated R$ 3.5 million of financing with the Bank of Northeast Brazil (BNB) in July The resource will allow future investments in the Paiva road system, in Pernambuco. The supplement is the result of the readjustment of the contract. Which was established in 2009 for the amount of R$14 million, with a 12-month grace period of the principal and a reduction of the monthly payment in the 36 months post-grace period. Due to the redistribution of the debt, the concessionaire s payment term was also extended by another two years. The concession, a Public-Private Partnership, ended in 2017 with the contribution of R$1.231 million in maintenance and conservation of the highway that comprises of the tolled stretch of the PE-024. THE BEST COMPANIES TO WORK FOR In 2017, Rota do Atlântico was recognized for the third consecutive year as one of the 10 best companies to work for in Pernambuco, according to the Great Place to Work Institute (GPTW), which brings together the best corporate practices in 53 countries. SALVADOR-CAMAÇARI: ONE HOUR LESS The concession Bahia Norte, responsible for one of the important corridors of circulation and distribution of products and services in Bahia, interconnecting the Industrial Center of Aratu (CIA), Industrial Hub of Camaçari, the Port Terminal of Aratu and the International Airport of Salvador, integrates eight municipalities with more than four million inhabitants. With the dual carriageway construction of 53 kilometers of highway, the travel time between Salvador and the factories of the Industrial Hub of Camaçari, will be reduced by one hour. Tourism in Bahia will also benefit with the new connection between the highway CIA-Aeroporto and Estrada do Coco, it will no longer be necessary to pass through Lauro de Freitas to get access to the beaches and hotel complexes upstate. ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 49

50 2,143 KM TRIUNFO CONCEPA TRIUNFO ECONORTE TRIUNFO TRANSBRASILIANA CONCER TRIUNFO CONCEBRA Founded in 1999 in São Paulo, it s one of the principal Brazilian companies in the infrastructure sector and a pioneer in diversification in the segments in which it operates. It was one of the first companies in the country to assume a highway concession, in Today, it manages 2,143 kilometers of highway and figures as one of the most outstanding companies in this segment, both in the number of kilometers administered, and in revenue and volume of traffic. There are five highway concessionaires: Concer (between Juiz de Fora and Rio de Janeiro), Triunfo Concepa (Rio Grande do Sul), Triunfo Concebra (which passes through Brasília, Goiás and Minas Gerais), Triunfo Econorte (which manages 341 kilometers of highways in Paraná) and Triunfo Transbrasiliana (responsible for the management of a 321-kilometer stretch of the BR-153 highway in São Paulo). DUPLICATION AND RECUPERATION Only Triunfo Concebra, which manages 1,176 kilometers of BRs 060/153/262, in the federal district of Goias and Minas Gerais, invested R$ million in dual carriageway works on its roads (such as 35 kilometers on BR-153, between the municipality of Prata and the junction with BR-262, in Minas Gerais) - in addition to R$ million in road surface restoration works. Concer also delivered the 24th footbridge constructed on the BR-040, since the beginning of the concession. It s the Passarela de Araras, located at kilometer 65 of the highway, in Petrópolis (RJ). Triunfo Econorte (341 kilometers connecting the states of São Paulo and Paraná and serving the alternative route for harvests in Mato Grosso do Sul, Mato Grosso and the south of São Paulo), permanently invests in infrastructure improvements, through works of capacity expansion and the restoration and maintenance of highways. Making this road network an important link with Mercosur. 50 OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

51 KILOMETERS CONNECTED Triunfo started in 2017, the use of corporate Wi-Fi in SAUs (Systems of User Attendance) and public spaces, including the project PRF Connect - giving network availability for agents of the Federal Highway Police who ve previously registered on notebooks, cell phones and tablets, thus helping the work of the agents on the stretch of the concession. RECOGNITIONS Triunfo Concebra received first place of the award Ser Humano Goiás from the Brazilian Human Resources Association, in the Best Practices of Endomarketing category. The winning entry, Follow the Tip with Triunfo Concebra, is a communication channel that shares institutional information through a podcast for employees. Committed to sustainability and to the preservation of nature, the concessionaire is developing new environmental programs that support the main conservation issues of the areas surrounding the highway. As a result of their commitment, the Triunfo Transbrasiliana holds international certification in ISO 9001, ISO and OHSAS respectively; quality, environment and workplace safety. ACTIONS FOR THE SURROUNDING COMMUNITIES OF THE HIGHWAYS In 2017, the 17th edition of the A Brake in Hunger campaign was held, with the allocation of 2.2 tons of non-perishable food to low-income families. Already, the campaign Stop For Health has offered basic health exams to more than 100 truck drivers on Duque de Caxias / RJ. E 500, environmental booklets were distributed to public schools in Petrópolis and Duque de Caxias. The Road Citizen project is a social project created by Triunfo. Econorte leads activities for the elderly, pregnant women, children and drivers. The focus is on meeting deprived communities, providing education, culture, entertainment and information on health care and improving the quality of life. ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 51

52 CONSORTIUMS PLAYING THE CITIZEN Renovias invests in numerous cultural and educational activities. An innovation, is the playroom, The Art of Playing. Through the initiative, 14 playrooms will be installed in the region, aimed at children aged 6 to 12 years old. Each structure contains 129 books, 40 educational toys and includes four kids workshops in each locality. With the campaign Ecolacre, the concessionaire ended 2017 with the delivery of 505 wheelchairs to entities from various regions. There were 105 units donated during the year. GOLD MEDAL FOR THE TRANSOLÍMPICA T he concessionaire ViaRio S.A. formed by the companies CCR and Invepar, won the competition to manage 13 of the 26 kilometers of the Corridor Presidente Tancredo de Almeida Neves - the Transolímpica, one of the important works of urban mobility in the city of Rio de Janeiro. ViaRio is responsible for the operation of the section from Avenida Brasil until the beginning of Avenida Salvador Allende, on the highway there are; two tunnels in each direction, 38 bridges and viaducts, two traffic lanes for motor vehicles, motorcycles, buses and trucks and a third exclusive lane for the BRT (Rapid Transport by Bus) system. 52 OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

53 RIO-TERESÓPOLIS: QUALITY CLIMBS THE MOUNTAIN CRT - Concessionária Rio-Teresópolis S / A, since 22nd March, 1996, has administered kilometers of the Santos Dumont Highway (BR-116 / RJ), in the state of Rio de Janeiro, in a section that encompasses the region where the municipalities are located of; Duque de Caxias (from the junction with BR-040 / RJ), Magé, Guapimirim, Teresópolis, São José do Vale do RioPreto and Sapucaia, going to the border with Minas Gerais, near the city of Além Paraíba. No less than nine kilometers of the mountain section were converted into dual carriageways by CRT in the last few years, within an impressive timetable of works. REAL TIME UPDATE Since 2011, the consortium Rota do Atlântico has managed the highway that gives access to the Industrial complex of Suape and to the south coast, routes referred to as PE-009 and VPE With 44 kilometers under concession, the road is the access route for passenger cars and commercial vehicles to the Suape Industrial and Port Complex, as well as providing limited access for drivers that are bound for the beaches of the south coast of Pernambuco. Among the concessionaire s highlights, which gained prominence in 2017, is online monitoring, in which images captured on the highway are updated every 30 seconds on the site. ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 53

54 INDIVIDUAL CONCESSIONAIRES MGO ADVANCES IN 2017 The concessionaire that manages kilometers of BR-050, in Minas Gerais and Goiás, invested R$908.8 million in 2017 in improvements and works. Among the highlights is the opening to traffic of kilometers of dual carriageway on the BR-050, in Goiás, with the construction of five routes to enable access to the opposite carriageways and two bridges. At the same time, MGO initiated the execution of 31 kilometers of dual carriageway that will be delivered by the end of the first half of In December 2017, MGO Rodovias received, for the second consecutive year, the certificate of recognition for their participation and actions taken on the BR-050 and within surrounding communities during the year. To promote the Right-Hand Program, developed by Childhood Brazil - the concessionaire is a signatory of the business pact and a partner in the program combating the exploitation and sexual abuse of children and adolescents on highways. MORE WORKS, MORE JOBS The kilometers of the Marechal Rondon Oeste Corridor, comprising kilometers of the Marechal Rondon Highway, SP-300 and 85.5 kilometers of 23 access roads, between the municipalities of Bauru (SP) and Castilho, on the border with Mato Grosso do Sul, will receive no less than R$1.2 billion during the period of the concession. ViaRondon, which manages the highway, reinforced in 2017 the commitment to the operation of an increasingly safe road corridor, prioritizing the hiring of labor in the region - with the creation of approximately 450 direct and indirect jobs. In the field of traffic education, ViaRondon has the BRCity program, which has already served more than ten thousand children. RETURNS FOR THE USER Caminhos do Paraná received the As 40+ Prize, awarded by the municipal prefecture of Ponta Grossa to the companies that contributed the most in 2017 in generating taxes and resources for the city. The concessionaire allocated R$90 million to the construction of dual carriageways on BR-277, in the region of Guarapuava-PR, and to the trench of access to Mariental, in Lapa, also Paraná- among many other works carried out on the kilometers managed by the company, which received more than 13 million vehicles in OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

55 ENTREVIAS: NEW ASSOCIATE Entrevias joined the other concessionaires associated with ABCR in September 2017, after winning the concession auction for the 570 kilometer lot of the highways-centro-oeste Paulistas, on the axis between Florínea, on the border between São Paulo and Paraná, and Igarapava, on the border of São Paulo and Minas Gerais. In March 2018, the concessionaire assumed the stretch between Bebedouro, Ribeirão Preto and Igarapava kilometers. The contract signed with the government of the state of São Paulo provides for investments of R$ 3.9 billion in the restoration of highways, expansion of the road network and the deployment of technologies and innovations that contribute to providing high quality services to users. The concessionaire has already started works on recuperation, dual carriageways and modernization of various stretches, as part of the first 12 months of implementation, the period preceding the collection of tolls. GOOD PROSPECTS In 2017, there were just over 69 thousand vehicles serviced by Rodovias do Tietê, who invested approximately R$64 million in improvements to the highways they administer and in services for the user. For 2018, the concessionaire has a series of bids for new routes on the radar, with good prospects for their approval. CONSTANT FLOW Rodovia do Aço, responsible for the management of kilometers of the BR-393 / RJ, from the border of MG / RJ to the junction with BR-116 (Via Dutra), in Volta Redonda (in the region of Sul Fluminense), maintained a good flow rate of almost 7.6 million vehicles, during FULL STEAM AHEAD FOR WORKS The concessionaire Tebe, carried out in 2017, road surface recuperation from km 00 to km 31, north and south, of the highway SP José Della Vecchia / Orlando Chesini Ometto, between the municipalities of Vista Alegre do Alto and Pirangi (SP), as well as road surface recuperation of kilometer to kilometer 169, kilometer 175 to kilometer 186 and 199 to kilometer 210, east and west, of highway SP Comendador Pedro Monteleone, between the municipalities of Pirangi and Palmares Paulista, also in the State of São Paulo. ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 55

56 SUPPORT TO THE COMMUNITIES In 2017, the concessionaire ViaBahia reinforced its responsible actions, with the donation of toys to the communities of the municipality of Santo Estevão - the focus is to strengthen the relationship with the people who live in the areas surrounding the highway. In commemoration of World Environment Day, the concessionaire carried out activities with children accompanied by their parents and teachers, to work to raise awareness about the preservation of the environment. TAMOIOS: NEW CERTIFICATIONS In 2017, the concessionaire won two new certifications of international standards, ISO 14001(environmental management) and OHSAS (occupational health and safety). It is the third certification obtained by the company that, in 2016, had its Quality Management System certified to the standard, ISO With this, Tamoios enters the select group of companies which have the Integrated Management System, which incorporates the three standards. Tamoios, which connects São José dos Campos to Caraguatatuba, on the north coast of São Paulo, crosses one of the most important areas for the preservation of the Atlantic Rainforest in Brazil. SUBSTANTIAL REINFORCEMENTS Rodosol - which manages 67.5 kilometers of Rodovia do Sol, on the stretch of the highway ES-060 that connects Vitoria to Guarapari along the coast of Espírito Santo - takes so seriously its mission to constantly improve its concession, that in 2017, it brought an engineer from Italy and a physicist from São Paulo to make measurements of the vibrations that occur within the asphalt of the highway, in order to predict what maintenance actions are necessary. CONTINUOUS INVESTMENTS In 2017, Morro da Mesa maintained permanent investments in the MT-130, on the concession section between Rondonópolis and Primavera do Leste, in Mato Grosso. It s the route for one of the main productive regions of the state, especially after the inauguration of the Logistical Railroad Terminal of Latin America, which Morro da Mesa assumed in precarious condition and is improving day by day, with an investment of R$211 million in improvements. LOCAL WORKFORCE Rota which administers the road system, Itaboraí-Nova Friburgo-Macuco, a total length of kilometers, currently has about 200 direct and more than 700 indirect employees. The majority of these employees are recruited in the region where the concession operates, contributing to local development. 56 OPERATING CONCESSIONAIRES ANNUAL REPORT 2017

57 ANNUAL REPORT 2017 OPERATING CONCESSIONAIRES 57

58 PROSPECTS PROSPECTS ANNUAL REPORT 2017

59 FOR A 2018 WITH MORE CONCESSIONS The data of the Advance Program, launched in 2017 by the federal government, estimates that, for 2018, the prominent sector will be transport infrastructure. Of the 75 projects planned for the year, highways, railroads, ports and airports, totalling 55 projects. The estimate is that investments will exceed R$130 billion, besides the generation of jobs and income. ABCR will continue to monitor and promote transparent dialogue with all the institutions of public authority, government and regulatory bodies so that the planning of the federal concessions will get off the ground. To this end, each year, the Association defines a strategic agenda aimed at improving the business environment and obtaining the government s recognition of the relevance and representativeness of the Association. In this way ABCR has contributed to the best economic and financial performance of contracts. Among the hot spots that need to be defined in 2018 are the regulation of Law 13,448 with the definition of the calculation of indemnity and the solution to the difficulties of the concessions of the 3rd Stage - and ABCR will act in an incisive way to defend the importance of regulatory adjustments. Among them, the state s amendment of the modelling of federal highway concessions, which should be valid for the 2018 auctions. In this new format, should take place, the auction for Rodovia de Integração do Sul (RIS), a 473 kilometer corridor in Rio Grande do Sul and Santa Catarina; as well as, BR-101 / SC and BR-264/265, between Jataí and Uberlândia. ABCR will also continue to contribute to the development of concession programs in the states, especially São Paulo (which completes 20 years in 2018), Mato Grosso, Mato Grosso do Sul, RioGrande do Sul, Minas Gerais, Bahia and Ceará, where the models move more rapidly. The Association maintains its firm position and focus on the search for the definition of a regulatory framework that guarantees the viability of contracts and to a resumption of infrastructure investments, vital to putting the country back on the road to growth. ANNUAL REPORT 2017 PROSPECTS 59

60 ABOUT THE REPORT GENERAL INFORMATION The 2017 Annual Report of the Brazilian Association of Highway Concessionaires (ABCR) was produced by the consultation of the entity s database and the support of the concessionaires in the provision of relevant information regarding the performance of the highway concessions sector between January and December ABCR appreciates the involvement of all who participated in the construction of this project SCENARIO ANNUAL REPORT 2017

61 PRODUCTION OF THE REPORT GENERAL COORDINATION Director of Institutional Communication ABCR, Editorial planning, writing and editing Weber Shandwick PHOTOS ABCR Archives and Concessionaire Archives, except for pages 60, 61 and 62: Istock by Getty Images DIRECTORATE CEO César Borges VICE PRESIDENTS David Antonio Diaz Almazán José Carlos Cassaniga José Renato Ricciardi Luiz Eduardo Barros Manara Marcelo Stachow Machado da Silva Paulo Meira Lins Ricardo Antônio Mello Castanheira Tulio Toledo Abi-Saber DIRECTORS Flavio Freitas Director-SuperintendentJoão Chiminazzo Neto Regional Director - Paraná e Santa Catarina Alexandre Barra Regional Director - Distrito Federal Raul Viana Director of Communication AUDIT COMMITTEE Wagner Gudson Marques Juan Gabriel Lopes Moreno Ana Silvia de Almeida LEGAL COUNSEL Karina Fera Beatriz Assini TECHNOLOGY CONSULTANT Wilson Castilho INFORMATION TECHNOLOGY Gerônimo Oliveira Franco DOCUMENTATION CENTER Hegle Beltrão de Oliveira APRESS AND COMMUNICATION CONSULTING Amanda Souza Regional Advisor - Paraná e Santa Catarina Weber Shandwick Agency NATIONAL TRADE UNION OFFICER OF HIGHWAYS, URBAN WAYS, BRIDGES AND TUNNELS Flavio Freitas - President ANNUAL REPORT SCENARIO 61

62 STRUCTURE OF SECTOR SHAREHOLDING CONTROL