The International Olympic Committee’s decision on 2 October to select the Brazilian capital of Rio de Janeiro as the host city for the 2016 Olympic and Paralympic games is likely to have significant repercussions for the future infrastructure and economic development of the nation.

From new investment in roads, airports and railways to the rapid development of the country’s hotel and tourism industry, Brazil will witness the launch of a number of large-scale projects over the course of the next seven years.

The fact that the country will also play host nation for the 2014 FIFA World Cup only provides further incentive to complete necessary infrastructure upgrades on time and problem free. According to UK Trade & Investment, Brazil’s infrastructure could require an investment of £10–30bn to successfully prepare for the event.

As the fifth-largest country in the world and the most influential economy in South America, Brazil is under particular pressure to successfully deliver for the Olympics Games, which it faced stiff competition from the US to host.

The event will mark the first time a South American country has hosted the event and with Brazil now being widely considered alongside Russia, India and China as one of the four major growing global markets, the spotlight for the event will be evermore intense.

“Brazil reportedly has about 1.6 million km of highways, of which 12% are paved.”

Realising this, the Brazilian government has already launched its flagship investment programme aimed at stimulating economic growth and developing infrastructure.

Announced in 2007, the Accelerated Growth Programme has allocated about £208bn for the next four years and a further £125bn for investments post-2010. By the end of 2009, the government hopes to have outlined state-funded infrastructure projects that can support the World Cup in 2014.

Improving transport links remains a particular priority for the Brazilian government and the country’s road infrastructure is likely to receive serious attention. Brazil reportedly has about 1.6 million km of highways, of which 12% are paved. They represent the main means for Brazilians to travel around the country and also account for 60% of freight transportation.

As companies around the world start to weigh up the new opportunities that could stem from Brazil’s Olympics investment, the UK’s Trade & Investment Brazil specialist Faith Quigley casts her expert view on the various road infrastructure projects Brazil has planned in the years ahead.

Alex Hawkes: What level of investment in road infrastructure is likely to occur in the lead up to the World Cup and then the Olympic Games?

Faith Quigley: Brazil is investing heavily in its entire infrastructure and has already allocated £10.7bn worth of investment for its road network. This figure includes the construction of about 45,000km of highways.

In the more immediate future, a package of concessions will be released in January 2010 which will be worth approximately £2.5m.

“Brazil is investing heavily in its entire infrastructure and has already allocated £10.7bn worth of investment for its road network.”

AH: What implications does that have for the nation’s individual cities, in particular Rio de Janeiro and Sao Paulo?

FQ: The state governments are also investing heavily in infrastructure in and around the cities. Sao Paulo, for example, is constructing a ring road akin to London’s M25, which is already partly complete. Once finished, it will have a massive impact on the city’s traffic problem.

One of the main problems in Sao Paulo is the amount of freight traffic that passes directly through the city, which accounts for about 30% of overall traffic. The ring road will not only allow freight to go around the city, it will also be connected to one of the country’s largest ports, just south of Sao Paulo, therefore enhancing commerce.

AH: How does the situation in the country’s southern cities compare to the north?

FQ: Road infrastructure in North Brazil is far less dense and in the case of the country’s Amazon region barely exists at all. Part of the Federal Government’s programme is to build a network of roads across the whole country to link up the main cities. This will undoubtedly benefit areas in the north.

AH: What business opportunities will the country’s preparations offer domestic and international firms?

FQ: If you talk to people in Brazil, they see road infrastructure as one of the areas where companies can get a huge return if they are actually investing in the projects or are contractors. If the project can be delivered economically then obviously there are huge gains to be had.

The road sector in Brazil is, however, very well developed. The country possesses huge construction firms that will be able to operate these projects themselves. I don’t actually see huge opportunities for international companies to come into the market.

“Part of the Federal Government’s programme is to build a network of roads across the country to link up the main cities.”

That said, the sheer scale of what the government is undertaking means there will be some room for international companies to manoeuvre in, particularly in more specialist areas such as transport consultancy and logistics.

AH: Finally, what repercussions will such investment and improvement to Brazil’s road infrastructure have even after the tournaments have been held?

FQ: Brazil is expecting the investment in infrastructure to pay off in the long-term, particularly with the associated development that comes from opening new access points to major ports and so on.

That’s one of the key focus points of the programme – creating a network of roads that enables more access to the main gateways in Brazil and ultimately the rest of the world.