Book Review: Bottlenecks and Solutions in the Brazilian Transport Infrastructure

Book Review: Bottlenecks and Solutions in the Brazilian Transport Infrastructure

If you are looking for research data on which to base your business case for the Brazilian transport infrastructure projects, the book “Gargalos e Soluções na Infraestrutura de Transportes” will be invaluable to you.

The Fundação Getulio Vargas (Getúlia Vargas Foundation) consistently publishes the top business research in Brazil. This book is no exception.  Its high quality information provides a rare glimpse into the infrastructure issues Brazil is currently undergoing – and does in a scientific way.

The book is written in Portuguese and was edited by Dr. Armando Castelar Pinheiro and Dr. Cláudio Roberto Frischtak. It contains several papers from big names in the infrastructure arena including Vinicius Carrasco, Ronaldo Seroa da Motta and Mansueto Almeida, among others.

The book speaks at great length regarding regulations, private investment and financing in the Brazilian infrastructure sector. Among the topics discussed are:

  • Regulatory risks in the Brazilian infrastructure sector
  • Private investment in infrastructure and financing
  • Infrastructure and environmental sustainability
  • Limitations of Brazilian public investment
  • Internal transportation costs and geography of Brazilian exports
  • Recent changes to and perspectives on the Brazilian airport infrastructure.
  • New legal reform for the Brazilian railway sector
  • The potential of Brazilian hydro ways
  • Evolution of and perspectives on port regulations in Brazil
  • Regulation and competition in highway concessions in Brazil

As you can see, it is very complete and dense material. You will see thorough academic research on infrastructure in this book, with lots of invaluable information and data.

This is not leisure reading, though, and will require a higher level of Portuguese fluency to read. But, if you are in the field, it will definitely be worth the effort.

If you are operating in the Brazilian transport infrastructure sector, I highly recommend this book.

gargalos e soluçõesBook: Gargalos e Soluções na Infraestrutura de Transportes
in Brazilian Portuguese
Editors: Armando Castelar Pinheiro and Cláudio Roberto Frischtak
348 pages
Publisher: Editora FGV (2014)


Buy it Now at Editora FGV


One Insider’s Tip that Can Save You Huge Nightmares in Brazil

One Insider’s Tip that Can Save You Huge Nightmares in Brazil

Is there a practical way to avoid problems in Brazil? Read more to learn of a practical way to avoid small problems that can grow into enormous issues.

Do you really know what your Brazilian suppliers are up to?

This is the story of a small but fast growing overseas organization that decided to venture into the Brazilian market.

As a way to quickly reach out to as many customers as they could, they decided to do some internet marketing.

“Let’s find someone to do it for us,” they thought. “We can delegate this work in order to focus on more important things.”

So, in the heat of the moment, the company hired a local Brazilian marketing provider to localize their content and implement an internet marketing strategy.

Oh, man! They were so excited to have the word out about their new products and about entering a new market.

Based on the premise that the more people you reach, the better the marketing campaign will be, the Brazilian service provider naïvely decided to send millions of unsolicited emails.

Pause for silence…

A couple days later, the CEO of the company got a call from their IT department in Toronto saying that they were receiving an unexpectedly high number of bounce back emails. Their corporate emails had also stopped being delivered.

“It seems our domain has been blacklisted on many servers and there is a strange flow of emails coming from… Brazil!” reported the IT manager.

Realizing that the emails may have resulted from their massive internet campaign in Brazil, the CEO called his service provider in Rio and got an interesting answer:

“Well, this is what we do for all our customers.
You didn’t tell us to do otherwise, you know.
Besides that, it’s how you can get the best bang for your buck.
We can reach a lot more customers at one time… yada, yada, yada…”

His local provider went on and on, giving long, wordy arguments without ever acknowledging any guilt over the incident.

It was clear that the service provider didn’t have a clue about the latest marketing permission trends, not to mention the many anti-spam laws had he just broken by carrying out this mindless strategy.

“But, it’s obvious you can’t do this!” shouted the CEO in disbelief.

And the milk was spilled.


The lesson we can learn from this story is that we must always check how things are done, especially in Brazil where everything ends up being assumed before it is actually done.

Something so obvious to the foreign CEO wasn’t at all obvious to the service provider. This is a classic problem of doing business in Brazil.

As you can imagine, the overseas company had to jump through not just a few hoops to get things back on track. They eventually recovered, but a lot of precious time and effort were wasted fixing the wrongdoing.

If it’s obvious, it needs to be said.

The issue with the company cited above might as well have been the story of the American company that inadvertently hired a local call center to reach out to their customers, and then used their “special” cold calling techniques. It could have been the French company that relied on their local supplier to raise “special” financing, or the Dutch company that never checked their supplier’s “special” sales tactics.

It doesn’t matter what field you are in, you will encounter “business as usual” situations and let your guard down. These types of activities look so obvious to you, that you’ll neglect doing the proper due diligence. Don’t be surprised to see your local suppliers implementing them in the most creative and strangest ways. But, then again, isn’t creativity one of the Brazilian fortes?

The provider’s conversation usually goes along these lines:

  • “Hey, don’t worry! This is simple. Let me handle the details for you.”
  • “Well, that’s super straightforward. Don’t worry about it, I’ll deal with it.”
  • “Never mind, we will find a way to solve this.”

That’s exactly the point when the milk starts to spill and you should stop the conversation.

The antidote is to insist on getting the details. Go after specifics.

In Brazil, nothing is obvious or simple. Ask the provider to spell out for you word for word what they are up to.


The Insider’s Tip You Need to Know

The secret to not having surprises in Brazil is to never assume anything when requesting work.

Whenever you are dealing with something obvious, use the golden rule to unlock the details:

Ask “But, how?”

Always solicit more details:

  • Ok, you want to promote my products using billboard advertisement. Tell me, how do you plan to do this?
  • You plan to do an internet campaign, right? How do you plan to interact with my customers?
  • You plan to raise some operational capital for this project? How are you planning to do it?
  • You are going to transfer the goods from São Paulo to Belo Horizonte? Nice… How?

Even if you are dead sure your supplier will do the work the way you imagine, ask for details.

Never assume anything until you hear the “how” they’ll be doing it. This will keep you safe most of the time and avoid any unpleasant surprises.

Not Micromanagement, But Effective Control

You may be thinking that asking for details may be perceived as micromanaging – not in Brazil.

By asking “how” you are effectively avoiding future headaches. Besides, there is already an expectation that you have a certain level of control over how things will be done in your project. Simply put, that’s how successful managers operate here.

If someone tells you they are blindly delegating in Brazil – using the typical delegate and forget approach – and not having any problems – they are most likely lying to you. Either that or they may be in bigger trouble than they think but just don’t realize it.

It’s literally impossible to work effectively in Brazil without probing how things are being done.

Summarizing, use this simple rule to avoid considerable headaches: remember that, even if something seems obvious, you need to have it spelled out, word for word. And, whenever you feel the details are not clear, ask “how” in order to gain better control. I guarantee you will have far less problems in Brazil using this approach.


Take a minute to share your experience dealing with details in Brazil. Leave a comment now and join the conversation!

Photo credits: Jon Jordan

3 Reasons Why You Should Start Paying Attention to the Water Crisis in Brazil

3 Reasons Why You Should Start Paying Attention to the Water Crisis in Brazil

Did you know that we are facing another water crisis in Brazil? Here are the main reasons why you should sit up and take notice.

#1 Another major drought is imminent in Brazil

Last week, while visiting some agriculture businesses in the interior of the Brazilian Southeast, I noticed a clear trend.

While farmers were extremely happy that their cattle pastures were growing exceptionally green and tall this year, they were also concerned that small creeks and streams on their properties were drying up way too fast this season.

This phenomenon is a reflection of the climate changes they are experiencing. Intense rainfall followed by intense periods of sun favored the development of grasslands.  However, those same intense storms with high precipitation in a short time period, followed by high temperatures, were affecting watersheds – which needed long, less intense rains to be replenished.

The impact was being felt in the entire farm water supply.

“The small streams in my pastures only have enough water for a couple months”, confessed one of the ranchers. Small creeks that run in direction of the region’s major rivers were drying up before the end of the rainy season.

I could see that the farmers in that region clearly knew they would have a hard year ahead of them and were getting ready to deal with the impact of a major drought.

In the cities far from the farming interior, no one seems to perceive what’s in store for them. They don’t know how dry their next drought will be.

#2 The Brazil Water Crisis is out of the headlines

I find it very strange that the Brazilian press has become very quiet in their coverage of the water shortage in Brazil.

It seems that the showers and humidity of the rainy season may have washed their worries away.

Many of the reservoirs for major cities of Brazil have been partially replenished with water. However, it may still take a few years and a lot of continued rain for these reservoirs to get back to normal.

No one seems to realize that the time to save is now, when there is still some water coming from the rainy reason.  Moreover, very little is being done to keep the topic relevant in the minds of the Brazilian population.

#3 A new water crisis will mostly affect the underprivileged

When new water shortages start to occur in major Brazilian urban centers, the most impacted group will certainly be the underprivileged. They will suffer not only with the physical scarcity of water, but also with increased utility costs, namely with electricity and consumable water.

But, how will the population react if there is, in fact, a large scarcity of water?

Remember what happened on 2013, one year before the World Cup in Brazil? At that time, a minimum increase in transportation costs triggered a major wave of demonstrations with a considerable number of people taking to the streets to protest against the government.

With water, we have a bigger problem.

Water is not like a cost, a tariff and a tax. If there is no water available, there’s nothing that can be done. No matter what, you can’t squeeze water from rocks.

During the 2013 protests, things quieted down substantially after government reduced the price of public transportation in São Paulo.

In the case of a major drought in mid-2015, will the government be able to distribute more water to quiet the population? Likely not…  There is very little room for political maneuvering under these circumstances.

So, this is reason I think you should keep a tap on the Brazil water crisis. There is a likelihood it won’t happen, but if it does, the impact will be big.

Keep the topic on your radar so you don’t get caught by surprise by something that can have a significant impact in your investments in Brazil. Also, read our report report on the Water Crisis in Brazil.

What is your point of view about the impact of the drought this year in Brazil? Leave a comment and let’s start a conversation.

An Unconventional Analysis of the Petrobras 2014 Financial Statements

An Unconventional Analysis of the Petrobras 2014 Financial Statements

5 things everybody ought to know about the Petrobras 2014 Financial Statements which are not on their books.

The 2014 audited financial statements for Petrobras have just been released. It is a refreshing moment for many analysts who are now dissecting each line of the report, happy as clams at high tide.

However, important facts may have gone missing in translation as the company struggles with its restructuring plan.

The big Gorilla is slowly swinging by the room while everyone else is concentrated on crunching the numbers.

Point #1: Recording losses in the financial statement proves that corruption affected the company in a tangible way.

This is the first time a Brazilian company has openly admitted the existence of a corruption scheme and has attempted to measure its impact by putting dollar figures on the effects corruption has had on their books.

No matter how the press, government, auditors or anyone else frames the fact, it is a rare historical moment when one can mathematically gauge how corruption can affect the bottom line of a publicly listed company.

Point #2: Executives will think twice before entering corruption schemes.

For many decades, Brazilian executives – often surrounded by armies of corporate lawyers – felt they were untouchable and going to jail was for mere pickpockets.

As a matter of fact, we have reached a major milestone in Brazilian corporate accountability. There is a clear prospect that high profile people will indeed go to jail for their inappropriate actions.

Now, I ask you: if you were a Brazilian CEO and saw your colleagues in danger of spending time behind bars because of their involvement in corruption and bribery schemes, wouldn’t you take extra care next time you were approached by a corruptor? I wonder how many of those CEOs are now doing their own internal audits to make sure they don’t have corruptees on their teams and making sure they’re not liable.

Corporate leaders and their banking counterparts will be much more conservative in dealing with ethical borderline issues. They certainly know the implications of being caught in the midst of Bribery and Corruption Schemes.

Point #3: Independent investigations prove their worth when measuring the impact of corruption on an organization.

Picture for a moment if there were no meaningful facts uncovered during the fraud investigations at Petrobras…  There would be no way to quantify and qualify company losses due to corruption. Besides that, we would enter a cycle of “he said”,she said” debates with very little meaningful insight into how much money was involved in the schemes.  It would be very easy to refute any write-offs related to the impact corruption had on the company.

However, I’m sure the auditors had access to very precise information to present US$2 billion in losses and US$14 billion in impairment charges in the financial statements.

These estimates are a sure reflection of the thorough investigation independently done by Brazilian police and officials. This means that these independent investigators had access to actual facts and data – a testament to the amazing work done by the Brazilian police.

Point #4: The Petrobras crisis is a major test for Brazilian democratic institutions

Imminently, the Petrobras scandal will hit the courts. High profile executives, bankers, politicians and lobbyists will be judged and prosecuted. It will take some time, but it’s certain that some important people will end up spending a few months in a Brazilian jail – not the best place to be.

But, how will Brazilian institutions deal with this episode? Will there be an attempt to reduce the autonomy of the Brazilian Federal Police – responsible for finding the most relevant evidence in this case? Will the Brazilian Parliament expel old school politicians involved in corruption? Will the Supreme Court act in an independent manner?

Brazilian democracy is relatively new and this may be one of the most important tests it will face in its short history.

Point #5: Where there is smoke, there is fire.

It’s hard to believe there were so many people allegedly involved in the Petrobras corruption ring. The numbers involved are also staggering. $17 Billion in asset and corruption charges: many countries don’t have a GDP that big. But, are there other Brazilian institutions that may follow the same pattern of corporate compliance and accountability?

How about the companies on the energy sector? How about the infrastructure sector? Could they be operating along the same premises?

Recently, I was casually chatting over the water cooler with a financial analyst in Brasilia and mentioned my amazement over the Operation Car Wash findings. He paused and replied,

“Well… if you think Petrobras had a problem, don’t be surprised when (if!) they decide to open the BNDES books.”

Food for thought…


Leave a comment now and let’s start a conversation. What is your view regarding the future of Petrobras?


Photo credits: Ken Teegardin

Why You Should Never Leave a Voicemail in Brazil

Why You Should Never Leave a Voicemail in Brazil

You may be wondering why you never get your voicemails answered in Brazil. You may be scratching your head now. Read more to find out why.

Leaving messages in Brazil doesn’t work

Leaving voice messages in Brazil can be a major waste of your time and huge source of frustration. But, you need to understand how things work here.

The reality is that very few — I mean, close to none — Brazilians check their voicemail.

If someone listens to your messages, certainly that person does because they know you are a foreigner!

There are several reasons why people don’t use voicemail in Brazil.

First, it’s not a custom. Simply put, no one is used to doing it.

Second, it costs money. You can leave as many messages you want for free. However, typically whoever receives them will need to pay to have access to their phone voicemail system.

Third, contrary to those in North America, Brazilian voicemail menus are cumbersome to navigate. To get to your message, the person will need to press a number of keystrokes and wait for very lengthy messages until it reaches the message you have left them – besides paying an access fee.

People will simply ignore their phone alerts indicating there is a message on their voicemail system.

How to leave asynchronous messages in Brazil

Since you are not able to leave voice messages, what’s the most effective way to contact people? Here are a few useful tips for you:

  • Call your contact at times when you are sure they are at their desk. I usually get better results when I call people at the beginning of their work day (from 9:00 am to 9:15 am local time) and before they leave for lunch (around 11:45 am)
  • Be prepared to call many times. Be patient, contacting people will always take a few tries until you are able to reach them.
  • Find alternatives to reach them. For instance, talk to their assistant and build rapport to find out the best time to reach the person.
  • Once you got in touch with your contact, ask the best way to communicate asynchronously. Ask them if they prefer to use SMS, skype, smoke signs or any other type of communication.

E-mail is also out of the question if you want to get an response – I’ll elaborate on email communication in a later posting. But, for now try other means of communication.

Currently, Brazilians are incredibly responsive to Whatsapp messenger. This may be a better alternative to using any other type of communication.

Don’t give up easily

Just to give you an example, recently it took me 3 weeks to get on hold of an accounting expert here in Brasilia. I had no choice but to connect with him – he is one of the best accountants in town and a specialist on the information I needed.

Regardless of my attempts, this person never responded to my calls and emails. I finally contacted his assistant and figured out he was under a pressing deadline. I asked her when the best time would be to connect with him.  Later that same week, I gave him a call just before lunch, around 11:55 am, and he answered the phone. That was a breaking point. I was able to schedule an appointment and now we are communicating via SMS.

In Brazil, you need to be persistent and always keep your cool. Try to connect using different approaches and insist until you succeed.  That’s how things work here.


Photo credits: Jason Denys