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

The report examines the Brazil's Federal Court of Accounts (TCU) as a key entity for risk management and preventive audits in federal land transport infrastructure. It finds that the TCU often becomes the primary body for approving Technical, Economical and Environmental Feasibility Studies (EVTEA), but typically does so too late in the project life cycle, leading to inefficiencies and wasted public resources. Through case studies of the BR-163/230/MT/PA highway, the North-South Railway (FNSTC), the South Integration Highway (RIS), and Ferrogrão, the document illustrates the TCU's role in defining environmental responsibilities and identifying flaws in feasibility studies, while maintaining a boundary that avoids infringing on the Executive Branch's discretionary power.

• The Brazil's Federal Court of Accounts (TCU) has evolved beyond its original financial and budgetary functions to act as a primary entity for risk management and preventive audits in bidding processes for infrastructure projects.
• The TCU often serves as the main body for the analysis and approval of Technical, Economical and Environmental Feasibility Studies (EVTEA), but this occurs too late in the project life cycle, which can result in the need to redo studies and contracts, causing a waste of public resources.
• In the concession of the BR-163/230/MT/PA highway, 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.
• The TCU maintains a boundary regarding the Executive Branch's discretionary power, as seen in the North-South Railway (FNSTC) sub-concession, where it ruled that the government—not the court—decides how to distribute environmental liabilities between the grantor and concessionaire.
• The use of Expression of Interest Procedures (PMI) for preparing feasibility studies has been linked to poor quality outputs, as potential concessionaires may omit strategic information to gain a future advantage.
• The Ferrogrão project illustrates critical failures in the viability phase, including a lack of on-site socio-environmental assessments and insufficient consultation with affected indigenous populations, which prevented the project from advancing to the bidding stage.

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} }