Picture of a country that may stop

The Estado de São Paulo, a major newspaper in São Paulo recently ran an impressively critical article about the infrastructure problem in Brazil. Renée Pereira, the author, highlighted six major points which may lead to what in Brazil is called the apagão, or blackout, highlighted by last Novembers Black-Out which left all of what has economic importance in Brazil without energy for two hours.

This black-out today is mainly pointed at logistics: With Ports, Airports, Roads and Rail at maximum capacity (in many cases over it), any further growth will lead to a gridlock which may then lead to a spiral downwards. Until 2008 this was a problem, but not so much - a combination of the Brazil faith in that "tomorrow" things will improve, a global crisis that took off some strain off the infrastructure for a few months and much slower growth prior to the crisis - made many believe, that things would somehow work out.

1. With Brazil barely dipping into the crisis and now speeding out, infrastructure is the big problem. Investments in ports are long-overdue and some problems are ridiculous: Take that several terminals at the main Santos Port cannot operate during rain, which makes them pretty useless during the heavy rainy season which lasts from end of November to March. 
2. Railways are a further problem - the railway network is at 28.000km - tiny, especially if you compare it to the (albeit well-developed) German network of 34.000km. In addition a large portion of the railway network in operation today is fully privately owned - a large portion belonging to the mining giant Vale, which exclusively uses it to ship iron ore to the (clogged) ports.
3. This puts a great strain on the roads, which transport 60% of all goods in the country today. Many roads, especially outside of the São Paulo area, are in a poor state of conservation and publicly funded - meaning that their state usually deteriorates over time. The poor state of the roads increases the costs of transport by 28% - in some cases the cost of kg/km is higher than in high income countries. Benchmarks I have done between my local logistics suppliers and German examples make it appear as if I were massively overspending on freight.
4. Airports fare not much better. São Paulo Guarulhos airport, the major hub in Brazil has been basically unchanged since the 1990s - but today operates at way over 100% of capacity - over the past 8 years, passengers have gone from 11m to expected 22m this year. With more freight being shipped back and forth and more Brazilians moving into the middle class and thus able to buy a ticket, will probably triple demand in less than 20 years (from todays clogged levels!). Guarulhos is not alone. This interesting statistics on wikipedia show 18 of the 20 major Brazilian near or over their capacity in 2009 (the first post-crisis year!) - in 2010 the situation is much worse. The Rio city airport Santos Dumont has surpassed the total 2009 passanger volume after the first 8 months of operation of this year. If you try to imagine further growth and then throw in a 2014 World Cup and 2016 Olympics, imagine the mayhem...
5. (and 6.) Finally access to energy (each citizen is average of 18h without power per year, 20min per week), water (only 85% have access to clean water) and basic sewage systems (only 58% have access to sewage systems) are also behind necessity, most of this access provided in the major metro areas. Especially the North-East of Brazil often seems like sub-saharan Africa...

Sadly, the author does not propose any solutions - although a mix of the following would surely be of great help: Privatize airports, roads and ports, support PPP in basic infrastructure and plan, plan, plan. Allowing uncontrolled growth, as is still common in São Paulo, ensures that private investors build residential and commercial buildings, factories and other industrial installations, but leave the roads, electricity and water supply to the state, without any form of coordination. In addition, strong public investment in basic infrastructure and the decentralization of all logistics needs from the São Paulo-Santos-Guarulhos triangle would surely give the country some room to breath...