Brazil's Lula to suspend new road works to save costs

Reuters, 01.05.03, 12:39 PM ET

BRASILIA, Brazil, Jan 5 (Reuters) - Brazilian President Luiz Inacio Lula da Silva has suspended all new road works in an effort to save money for social projects, local media reported on Sunday. The measure, which could save 5 billion reais ($1.46 billion), was announced this weekend by Transport Minister Anderson Adauto Pereira.

"I received from the president the judgment of defining clear priorities," Pereira was quoted as saying in daily Jornal do Brasil. "So we decided the priority is the upkeep of the road network." Under the decision, about 60 tenders for the building of new roads will be suspended but old roads will continue to be maintained. Pereira said he may ask the army to help in upkeep of existing roads.

According to this years budget, some 7.8 billion reais was destined to be spent on the road network in 2003, including new roads. The decision was the second cost-saving measure to be announced by Lula's new government since it took office last week. The first was the suspension of the purchase of 12 new fighter jets for $700 million.

Lula, who is Brazil's first president from a left-wing party, has made his top priority a "zero hunger" program to help Brazil's estimated 54 million poor.

With Brazil's finances constrained by strict fiscal targets under a $30 billion IMF loan, Lula needs to save money where he can to both meet spending targets and fulfill his promises of spending on the poor.

His justice minister, Marcio Thomas Bastos, also announced this weekend that the government intends to regularize ownership of shantytown housing, allowing owners of properties in Brazil's vast slums to legally own their dwellings.

While helping the poor in slums, the move could also help the economy as millions in Brazil have no access to credit because they have no formal address. Copyright 2003, Reuters News Service