EBEI: Brazilian Company of Engineering and Infrastructure

Interview with Maria Beatriz Hopf Fernandes, Director and President of EBEI (Empresa Brasileira de Engenharia de Infraestrutura)

Can you quickly tell us a bit about the history of EBEI?

EBEI (Empresa Brasileira de Engenharia de Infraestrutura), the Brazilian Company of Engineering and Infrastructure, was founded in March 2009 after the acquisition of TRENDS Engineering and Consultants, which was founded in 1995. As such EBEI has a long history of technical expertise and experience and together with its multidisciplinary team who are all highly qualified, EBEI is more than capable of taking on new challenges. I think one of our best strengths is our continuity which we have had over the last 4 years. When we win bids for projects, what makes me happy is not the revenue increase, but the challenge to be involved in these kinds of projects. This is what we get excited about here at EBEI. We are all part of a team here, no one is referred to as Dr or Chief, we are all working together as a team.

What is your evaluation of the engineering and infrastructure sector in Brazil at the moment?

The engineering and infrastructure sector in Brazil has grown tremendously mainly because of the World Cup and the Olympics. We now have new stadiums and in terms of mobility and hotels the sector has also really grown. The sector has grown due to the need to tackle and eliminate some of the hindrances in our infrastructure, for example the fact that in Brazil exportation has a lot of difficulties due to lack of infrastructure and so our exports are more expensive than they could be. The government doesn’t have all the money needed to invest in highways, ports and airports and so it has to be done via concessions. There is a lot of work to be done in terms of infrastructure in Brazil.

Could you tell us a bit more about these concessions and partnerships with private companies for the implementation of ports, for example with Cargill, Libra, etc.?

We have worked in partnership with these clients that you have just mentioned. Normally these companies have to put forward a plan for implementing a port terminal for example. They have to put forward the basic engineering proposals. We at EBEI have the advantage that we work in partnership with an English company that makes a simulation of the movement of cargo so this gives us an extra edge in this sector and allows us to secure more clients and contracts.

There is another type of partnership that we are involved in that is concessions. This is where we have to carry out studies together to know exactly how much the concessionaire is going to have to spend on the project. Therefore the project´s plan is fundamental and for this we have to know all about the movement of cargo, the type of cargo, the demand, etc. We work in this area to support whoever is going to take on the concession, we set the prices and other things that they may need to be competitive and win the bid.

In terms of engineering ports in Brazil, I think that perhaps for a very specific, special port we might need special engineering capabilities from a foreign company. However I think that in terms of airports it is definitely necessary to have a partnership with a foreign company because Brazil has never undergone an airport project alone. Therefore in this case, I believe it is necessary to combine the advantages of working with a foreign company who has years of experience in the field and a local company that knows the Brazilian market and its laws and regulations.

Thus in this sense there is a lot of working together with foreign engineering companies.

The other kind of international involvement we have is from investors who come and build factories for automobiles and factories for other industries. There used to be a lot more of these investors but they seem to be decreasing in numbers. You do still see foreign automobile or motorbike factories being set up here but much less than before.

These foreign investors like to bring with them a trustworthy engineer, but they need local engineers who know the country. These are good partnerships but this as I said has been reducing lately. As you know the economic outlook for Brazil this year is undesirable and so investors are leaving. There are expectations that 2015 is not going to be a good year because people feel that all of the economic troubles which are going to be covered up in the run up to the 2014 elections will all come to the surface in 2015. Whoever wins the presidency is going to have a lot to deal with!

In any case, in terms of engineering there is going to be a lot to do, there are going to be lots of highways, ports and airports to be built etc. The government, in addition to limited financial resources, is slowly in bidding process due to Brazilian laws. So the government needs to transfer the infrastructure building via concessions.

Working with the government has a certain comfort factor because you know that you are always going to have work. On the other hand, working in the private sector is not so reliable for example if you look at shopping malls, there was a huge boom in shopping malls in recent years, but this presented a great reduction. With the government you can be assured that there will always be projects to work on and so that is why engineers always have a foot in with government projects.

Can you tell us a bit more about the concessions for the Paraná River and the São Francisco River?

There are not yet any concessions for these projects: we are carrying out the technical, economic and environmental feasibility studies for the government for these projects. We have finished these studies for the Paraná River and there is no doubt that a waterway on the Paraná River would be viable for cargo and export purposes. We are working now on the detailed design and when it will be concluded the government can prepare a concession process. Considering the flexibility of the private sector would be faster if this sector was interested in developing feasibility studies, but it is very difficult to motivate them to do these studies that are always performed by the public sector.

A waterway is the cheapest way to transport heavy cargo! The most efficient ways of transporting cargo are by railways or waterways. These are the cheapest form of transport, they are efficient and pollute the least but they are the minority in Brazil. In 2016 there is going to be a PIANC conference to put forward proposals of linking railways and waterways here in Brazil. There is also a lot of work going on at the moment in terms of future implementation of railways here in Brazil. At the end, infrastructure in Brazil is viable and can be competitive on a worldwide scale and a sensible reduction of the exportation costs will be possible.

What about concessions and plans in terms of the highways?

We have worked on many occasions with our client the State of Sao Paulo for the concession of the highways. One of the criteria for the highway concession in the State of Sao Paulo was that the concessionary should foresee costs for the supervision consultancy services for the project implementation. Whoever carries out the works has to pay for the state to contract a supervisor for them. So we are supervising on behalf of the State the highways that were given under concession to be sure the concessionaire follows the quality standards and the plans that were proposed. We are also contacted by concessionaires to develop studies and designs for highways.

What are the main challenges that EBEI faces at the moment and what is your strategy?

The main challenge is to continue growing in 2014 and 2015! This is a big challenge. Our strategy is to get through this difficult period. I think the future is in concessions and finding foreign partners. I think this is the best way for a successful growth. I am not too worried about these two years since we have enough backlog on contracts to get through this period.

Can you tell us about what you have in mind for the international partners in terms of these concessions?

I have some partners who have found EBEI out. I have partners in Belgium, Germany and Spain. They have contacted EBEI because they intend to work in Brazil, and they were not interested on buying a company here, as other foreign investors have done. Usually it is very difficult for a foreign company to participate on biding processes for the public sector. So they do not tend to bid, only in the case of concessions, then they do bid. We have relationships with a variety of foreign companies and engineers who are specialised in different areas. So, when the bid process is for concessions, for example for an airport, I can say that I have a partner who works with expertise in airports, and I can negotiate with the partner in order to work together on that concession.

As I said, these are foreign companies that came here looking for me and together we have built partnerships. The Sao Paulo Ring Road Highway is an example of an international partnership that we have for a concession. It was an international bidding competition by IADB (Inter American Development Bank) for this project, but alone my competency was not enough to score the highest points. I have looked for a foreign partner, a Spanish partner in fact, and together we won the bid.

Is it easy to find these foreign partners?

Actually, Brazil has been in the world spotlight recently. So many foreigners came here looking for partners and opportunities. This means there are a lot of foreign companies here that you can contact. The problem is that you do not necessarily understand the way they work for on a competition. Of course you know they are international and very competitive but they have a particular way of working. You need to have a work empathy with them or it does not work. I have had a series of contacts with foreign companies but at the end of the day it is all “trial and error”, there are some companies that I will never work with again! This is one of the challenges, to try to choose the companies to work with. We also have to consider what we could offer as a national company. We know our country and this is the great advantage we can offer in these partnerships. That is the benefit for concessions biddings processes for both, national and international partners. I have a good expertise in ports, I have had excellent relationships with the port sector since the Special Secretary of Ports was created, I travelled a lot to learn all about ports, etc. It is all about building relationships.

In terms of investment, I understand you have a partnership with the World Bank?

It is not investment as such. We have two projects with the World Bank: the 4th line of the Metro and the Transport Plan for Rio de Janeiro. We have contracts loaned by the World Bank where we are Project Managers. They want to know if the Government is doing what they said they would do. For example: if these contracts will be completed on time, they want to know that the trains that have been purchased from China have arrived and that they are up to standards, etc. Basically, we are contracted by the World Bank for the supervision of these projects, to know the way they are carried out and how the bank´s money is being spent.

Can you tell us a bit about the international PIANC-COPEDEC conference that is going to be held in 2016?

The PIANC-COPEDEC is an international port and waterborne transport organisation that establishes the laws and regulations for the industry and it meets every 4 years. In 2016 the meeting will be held in Brazil. I was invited to take part as part of the local committee which is going to be composed by representatives from the Government, and just one representative from the private sector. I was chosen to be that representative. There are going to be two conferences, one in Rio de Janeiro that will have members from Europe and the other in Brasilia. Since this meeting is going to be held in 2016, there is still plenty of time to prepare it. We are preparing lists of what should be done, what will be discussed, etc. We want to make sure we also discuss issues such as river ports, internal navigation, etc. There are still two years to prepare the meeting. Bur it is not the same as preparing for the World Cup! We are preparing who will be chosen to give speeches, where it will take place, etc.

Could you tell us about the Olympics and the management of sanitation?

The main area of the Olympics that is going to have to be prepared by the government is sanitation. Brazil needs much investment in sanitation, we are really lacking in this department. Even after the Olympics the government is going to have to invest more into this area. I think it will be difficult for the government to give concessions in this area. There are already some concessions in this area, but only in a scale of municipalities, not in a national or state scale.

To conclude the interview could you tell us how you see the future for your company over the next 5 years?

I want it to have doubled. I want to have a team of qualified partners to be able to run the company, so that I can take a step back, I don’t want to leave because if you stop working you become old! So, I want to make sure that in 5 years more, I don’t have to work as much! I would like to take a step back and work more as an advisor. At the moment my day to day is really hectic, I am involved in all areas of our projects so it is really a hard work.

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