On Building the Roads to Rio

Kiln casualty underwriter Chris Jones at the Construction Liability workshop in Rio with Marco Castro of Lloyd’s and Dennys Zimmermann, Clyde & Co Representative

Enduring years of anxiety and self doubt about our own transport system in the lead up to this Summer’s Olympics, Londoners probably worry more about such things but even the fun loving Cariocas who live, work and party in Rio de Janeiro must have wondered whether the IOC delegates had knocked back one too many caipirinhas on Ipanema beach before awarding the 2016 games to their beautiful but seriously neglected city.

Typing this at the end of a few days in the “City of God” there are some indications nevertheless that Rio is starting to get its act together. True the airport is still grim and uninviting but a few contractors’ hard-hats on show suggest it is about to change. Much evidence of scaffolding along Copacabana beach may also be a sign that those very tired hotels are having a long overdue makeover. The pot-holed roads are all nearly now filled and the battered old people-carrying vans mostly retired. Even the metro will soon have six new stations, albeit at the end of the same single line that passes for a rail network.

Inadequate transport and communications links is a problem beyond Rio. The World Economic Forum has ranked Brazil’s weak infrastructure 104th out of 140, well below all the other BRIC economies. Ambitious for her country to become an economic superpower, the popular new President Dilma Rousseff unveiled in August a $66 billion plan to build or improve 4,500 miles of highways, 6,200 miles of railroads and completely modernise the poorly maintained air and sea ports. More committed than the previous administration, according to Reuters, this one looks set to properly tackle corruption, red-tape and engage more transparently with the private sector to attract much needed foreign investment capital. No coincidence therefore that David Cameron and a forty strong business delegation visited Brazil last month to boost trade links. UK PLC is well positioned to profit from Rousseff’s capital investment programme and leveraging London’s pre-eminence in the insurance industry could play an important role.

After the liberalisation of the local market following decades of a state run monopoly, Lloyd’s was the first reinsurer authorised to operate in Brazil, opening a representative office in Rio in April 2008. With eight syndicates now on the ground, underwriters are busy partnering local reinsurance producers to service the huge infrastructure projects coming on stream. Typical of the collaboration was a market workshop hosted recently by Lloyd’s at the Brazilian Insurance Institute on construction liability. Fostering relationships by sharing expertise in this way is a strategy that should reap advantages long after the roads and railways are built and Rio’s Olympic flame is extinguished.

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