Fernão Justen de Oliveira: "The competition in Lotex’s bidding must be important"

GMB - It has been estimated that the bidding procedure for Lotex will occur at the beginning of the second half of 2017. Is that estimation feasible?
Fernão Justen de Oliveira - Yes, because the consortium that will prepare the Lotex privatization project has already been hired by BNDES. The Federal Government estimates that the bidding will take place in the second half of 2017. But a project of this magnitude faces several obstacles, which may delay the start of the bidding process.

What are the benefits of adopting this privatization model for the Caixa and for those interested?
The main benefit of the privatization of Lotex is the possibility for the State to use the private experience to increase the collection with the Instant Lottery. The justification for this project is precisely the low profitability of this lottery compared to other countries. The privatization of Lotex allows greater marketing of instant lottery products because it increases consumers' access to their products.

What will Lotex’s bidding process be like?
The consortium of companies responsible for the privatization process will still define. But it should comply with Law 13303/2013, which regulates state-owned companies. It is possible that the criterion of judgment is the highest award value for Lotex or the best technical project. This will depend on the strategic decision of the BNDES, which is responsible for the privatization.

Do you believe that Caixa will adopt the same model for fixed-odds betting, or sports betting?
Given the operational similarities between sports betting, fixed-odds betting and Lotex, it is very likely that the model will be the same. But extending the model to other bets will depend on its outcome in the pilot project of Lotex and also the prior technical study, as is being carried out for the privatization of Lotex.

Is it possible that companies form consortiums to compete for Lotex?
The legislation admits consortium formation and this is recommended for projects of this magnitude and complexity. But it will not be surprising if the tender notice prohibits the formation of consortiums, as long as it presents a consistent technical justification.

How do consortiums normally operate in tendering procedures like this?
The operation of the consortiums in the bidding of Lotex will depend on the forecasts of the public tender, because Law 13303/2013 does not contain specific rules on the matter. It is possible that the consortium requirements are drawn from the general bidding law (Law 8.666 / 1993). In this case, a consortium commitment will be required, signed by the consortium members, and an indication of who will be the leading company. The great advantage of consortiums is the possibility of adding technical experience to financial capital in a single operator. How this sum will be considered in the privatization of Lotex will depend on the forecast of the bidding document.

Do you believe that Lotex's bidding will be very competitive?
The competition in Lotex’s bidding must be intense, given the high profit potential of instant lottery exploration. The expectation is that it has a large participation of foreign and domestic companies, which should intensify the dispute.

Source: Exclusive GMB