Brasilia: Early one Saturday morning in April, President Dilma Rousseff’s top aides filed into her official residence in the Brazilian capital, toting blueprints of a $35 billion infrastructure plan. By the time they walked out, night had fallen.

During that marathon session — some 10 hours in all — Rousseff tore apart the proposal, flashing her famous red-hot temper and ordering cabinet members to strip out projects she deemed unfeasible before coming back to her, according to two officials with knowledge of the discussions. The plan’s unveiling, originally scheduled for this month, was pushed back to June 9.

That tense meeting, and the delay it triggered, underscores just how much Rousseff has riding on this package. After years of rolling out infrastructure initiatives that had only mixed results, the embattled president needs this one to be a hit to patch up Brazil’s faulty roads, jump-start a sputtering economy and lift her popularity from record lows.

Yet the budget cuts that her administration is simultaneously pursuing — as part of an effort to maintain the country’s investment-grade ratings — are working against the plan, taking away some of the much-needed government guarantees and funding. What’s more, many of the Latin American nation’s biggest construction companies, the prime candidates to bid for road and railway concessions, have been hobbled by the same corruption scandal that has turned many Brazilians against the 67-year-old president.

“You can’t launch a sweeping plan at a time of budget cuts,” said Bernardo Figueiredo, a logistics consultant in Brasilia who had served as head of the state planning company during Rousseff’s first term. “If you don’t have government money, you can’t build railways.”

Those financial limitations are evident in the draft proposal that’s being circulated among government staffers.

Most projects to be announced this month will be to modernise existing roads and railroads, a less capital-intensive venture than building new ones, according to one of the two officials who asked not to be named because they weren’t authorised to speak publicly on the matter.

The only new railroad ready to be tendered for operation this year is a 1,350-kilometre tranche of the North-South Rail in central Brazil, according to a third official involved in the design of the proposal.

Projects shelved

Rousseff’s track record with large-scale infrastructure projects has been spotty since she succeeded her mentor Luiz Inacio Lula da Silva four years ago. In 2012, she unveiled a plan to put up 14 new railways for concession. Not a single auction was ever held. The following year, a planned 35 billion real (Dh40.9 billion, $11 billion) high-speed train to link Sao Paulo with Rio de Janeiro was shelved as was the construction of an 18 billion real hydroelectric dam in the Amazon rainforest last year.

In an economy that has been slowing for the better part of the last four years, bringing an end to the commodity export-fuelled boom of the previous decade, poor infrastructure is a key shortcoming.

Brazil has just 24 kilometres of paved road per 1,000 square kilometres, compared with 83 kilometres in neighbouring Argentina and 360 kilometres in China, according to the National Transport Confederation. And the country has been investing less than the equivalent of 2.5 per cent of gross domestic product in infrastructure in recent years, compared with an average of 8.5 per cent in China between 1992 and 2011, according to data compiled by the Brazilian government and McKinsey & Co.

For significant advances to be made, Rousseff would need to show she not only has adopted a more responsible fiscal stance but also taken a more investor-friendly approach, according to Bruno Batista, executive director of the National Transport Confederation. That includes abandoning policies such as capping profits on infrastructure investments, a move that her government is considering as part of a series of regulatory changes.

Adding to Rousseff’s challenge is the troubled state of the country’s construction companies. In the aftermath of the corruption scandal, a kickback scheme involving supply contracts from state-run oil company Petrobras, Brazil’s biggest builders have struggled to remain current on debt payments. Two of them, OAS SA and Galvao Engenharia SA, filed for bankruptcy protection.

“Brazilian players are debilitated,” said Wellington Moreira Franco, who was aviation minister during Rousseff’s first term. “Operationally the government doesn’t have the players to build nor to provide the necessary financing.”

Fiscal austerity

The state development bank, BNDES, cut lending in the first quarter by 24 per cent and reduced the amount of subsidised lending available for all projects, steps that were taken as part of Rousseff’s new fiscal austerity push.

One of the biggest hopes for Rousseff’s infrastructure programme came with the visit of Chinese Premier Li Keqiang, who held out investments of as much as $53 billion, including a railway linking the Atlantic Coast to the Pacific Coast via neighbouring Peru. Yet with feasibility studies still not underway, the results may be years off.

There is no shortage of critics who doubt Rousseff’s ability to successfully implement the new plan after its roll out. Roberto Piscitelli, a finance professor at the University of Brasilia, speaks for them when he says, “let’s not have any illusion” about the programme.

It’s very unlikely to provide meaningful stimulus for Latin America’s biggest economy, he said. “We have enormous problems of long-term planning,” Piscitelli said.