Brazilian energy company Petrobras has recently begun work on an 850-kilometre pipeline that will carry ethanol from the producing centre in the country’s mid-west region to the main consumption centres of Sao Paulo and Rio de Janeiro. When it is completed in 2014, the pipeline will have the capacity to carry 21 million cubic metres of ethanol each year and will replace 1,500 delivery trucks that currently handle the transportation.
Sustainable Energy Projects…
Three separate pipeline projects were proposed by different groups in 2008, with the state-owned Petrobras eventually getting the go-ahead. The pipeline is required to transport Brazil’s growing ethanol production, with its cane crop increasingly being switched from sugar to ethanol output. The sector was forecast to attract $17 billion in investment in the six years from 2008 in an effort to meet growing domestic and export demand. The US, Japan and the EU are being particularly targeted for increased sales.
Petrobras has recently completed a 661-kilometre natural gas pipeline that runs from the country’s second largest gas reserve to northern Brazil. This runs through the Amazon rainforest and presented many construction challenges that included changing water levels, unfavourable soil conditions and the dangers of tropical diseases. Barges were used as floating construction sites in flooded areas so that work could continue during the wettest season. Helicopters were also used to transport pipes to inaccessible areas while local labour and campsites reduced worker transportation times. Care had to be taken when working in areas with fragile ecosystems.
The pipeline projects are driven by increase energy needs in Brazil, with electricity consumption forecast to rise by 5.9% each year until 2019. Much of this increase is expected to be met through hydroelectric power plants, with many likely to be sited in the Amazon jungle region. The Ministry of Mines and Energy’s ten- year plan aims to increase energy generation capacity from 112 megawatts to 167 megawatts by 2019.
Although a four-fold increase in wind power is predicted, hydroelectric power will account for the bulk of the output, going from 83 megawatts to 117 megawatts. This will require the construction of many new dams and the flooding of hundreds of square kilometres of land, resulting in protests from environmentalists, local communities and other bodies. The government justifies the proposed construction on the grounds that hydroelectric power is the cheapest source of energy and will help it to meet the commitments it made at the UN Conference on Climate Change in Copenhagen in 2009.
Boom In Every Sector Set to Continue…
Brazil is one of the emerging BRIC (Brazil, Russia, India and China) countries, which are experiencing rapid growth across many sectors. In addition to energy needs, a growing middle class population is creating a lot of demand, particularly in the construction of shopping malls and improved infrastructure. The country escaped the worst of the global economic crisis and, as a result, has recovered much quicker than most, with economic growth forecast to average 5.1% annually.
One of the biggest construction projects underway currently is a high-speed rail link that will connect Campinas, Sao Paulo and Rio de Janeiro at a cost of $17.4 billion. Another is a programme to regenerate Rio’s dockland and waterfront, which incorporates multiple projects that will include the creation of tourist attractions and a residential sector.
Residential development is a big factor behind Brazil’s construction boom. The government announced a $152 billion affordable housing programme in 2009. This will build three million social homes in a 15-year period and aims to clear many of the country’s slums by providing homes for low income families. The eradication of poverty is a major issue and the hope is that the programme will create a better social base so the economy can grow faster.
Sport is a further driving force for construction, with Brazil due to stage the FIFA World Cup in 2014 and Rio de Janeiro hosting the summer Olympics Games in 2016. As well as the need to build stadia, these events have required a major upgrade to the country’s infrastructure, with $11 billion being allocated to the World Cup and $14 billion for the Olympics. Improvements to transport infrastructure include road, rail and airport upgrades and expansion while hotel accommodation is being increased and improved.
The outcome of all this activity is that employment in construction is rising rapidly. This has translated into increasing costs, with construction salaries up 7.5% over the past year and construction costs overall increasing by around 7% in some regions. Nevertheless, with a growing population that is becoming wealthier, the pace seems unlikely to slacken. Over 37 million housing properties are forecast to be built by 2030.
The Brazillian construction market is certainly a stark contrast to that in the UK and other western countries.