The Role of Brazil's Federal Court of Accounts in Managing Social and Environmental Risks for Federal Railway and Highway Concessions

This report analyzes the role of Brazil's Federal Court of Accounts (TCU) in the prior oversight of federal railway and highway concessions under the Investment Partnership Program (PPI). It examines how the TCU manages socio-environmental risks and the impact of its timing in the project life cycle, specifically regarding the approval of Technical, Economical and Environmental Feasibility Studies (EVTEA).

• The TCU has evolved into a primary entity for risk management and preventive audits of bidding processes, often acting as the main body responsible for approving feasibility studies (EVTEA) due to a lack of government review at the start of the project life cycle.
• The TCU's involvement in the project life cycle occurs too late, as it typically reviews documents after they are completed. This timing can lead to the need to redo feasibility studies, bidding notices, and contracts, resulting in delays and a waste of public resources, as seen in the South Integration Highway (RIS) concession.
• In the BR-163/230/MT/PA highway concession, the TCU intervened to ensure clear contractual rules regarding the responsibility for pending environmental requirements, valued at over R$ 350 million, to prevent legal disputes and ensure socio-environmental viability in the Amazon biome.
• The TCU maintains that the distribution of environmental liabilities is a discretionary decision of the Executive Branch. This was demonstrated in the North-South Railway, Central Segment (FNSTC) sub-concession, where the TCU refused to mandate that the sub-concessionaire bear full responsibility, arguing it could disadvantage the State and society.
• The use of Expression of Interest Procedures (PMI) for preparing feasibility studies has been linked to poor study quality. The TCU noted that potential concessionaires may omit strategic information in EVTEA to gain an advantage if they are later awarded the concession.
• The Ferrogrão railway project illustrates the risks of inadequate feasibility studies, with the Federal Prosecutor's Office (MPF) citing a lack of on-site socio-environmental assessments and a failure to properly consult affected indigenous populations.

APA

Climate Policy Initiative (2021). The Role of Brazil's Federal Court of Accounts in Managing Social and Environmental Risks for Federal Railway and Highway Concessions. https://www.climatepolicyinitiative.org/publication/the-role-of-brazils-federal-court-of-accounts-in-managing-social-and-environmental-risks-for-federal-railway-and-highway-concessions/

Chicago

Climate Policy Initiative. The Role of Brazil's Federal Court of Accounts in Managing Social and Environmental Risks for Federal Railway and Highway Concessions. 2021. https://www.climatepolicyinitiative.org/publication/the-role-of-brazils-federal-court-of-accounts-in-managing-social-and-environmental-risks-for-federal-railway-and-highway-concessions/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=The Role of Brazil's Federal Court of Accounts in Managing Social and Environmental Risks for Federal Railway and Highway Concessions |date=23 November 2021 |url=https://www.climatepolicyinitiative.org/publication/the-role-of-brazils-federal-court-of-accounts-in-managing-social-and-environmental-risks-for-federal-railway-and-highway-concessions/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2021role, author = {{Climate Policy Initiative}}, title = {{The Role of Brazil's Federal Court of Accounts in Managing Social and Environmental Risks for Federal Railway and Highway Concessions}}, institution = {Climate Policy Initiative}, year = {2021}, month = nov, url = {https://www.climatepolicyinitiative.org/publication/the-role-of-brazils-federal-court-of-accounts-in-managing-social-and-environmental-risks-for-federal-railway-and-highway-concessions/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }