July 15 (Bloomberg) -- Sao Paulo's stop-and-go traffic costs Luiz Fernando Lucas more than time when he drives into South America's biggest city on business.

In March, Lucas had to halt production at his cleaning products factory for two weeks after he missed a meeting with the only supplier who could keep his plant running. Another time, a customer tired of waiting and canceled their rendezvous, losing Lucas 35,000 reais ($21,800) in sales.

``I can't tell how many business opportunities and time I have lost because of this terrible traffic,'' said Lucas, 32, whose factory is in Sao Jose do Rio Preto, 450 kilometers (280 miles) from Sao Paulo. ``The stress is enormous.''

Traffic jams in Brazil's financial heartland are becoming more frequent and lasting longer as economic growth together with a rise in consumer loans led to a 37 percent increase in the number of vehicles registered in the city since 2003. Congestion set a record at 7:30 p.m. May 9, when 266 kilometers of traffic was at a standstill, according to the state's Traffic Department.

Traffic disruption costs Sao Paulo and its residents about 4.1 billion reais a year, according to the Sao Paulo city Transportation Department.

``Sao Paulo is one of the worst five cities in traffic congestion, along with New Delhi, Mexico City, Beijing and Lagos,'' said Paulo Resende, a transportation specialist at the Fundacao Dom Cabral research foundation in Belo Horizonte. Resende says he has a doctorate in logistics and transportation planning from the University of Illinois at Urbana-Champaign.

Mayor Gilberto Kassab has promised to build express bus lanes, buy computer-synchronized traffic lights and introduce a toll on cars driving downtown. Kassab hasn't said how much his plan would cost nor given estimates as to how much it might reduce congestion.

`Irreversible Situation'

``We've come to an irreversible situation,'' Kassab told reporters on May 6. Rising transportation costs ``are the price we will have to pay'' for the worsening traffic.

The City of Sao Paulo has 12 million residents. Including surrounding suburbs, there are about 19 million inhabitants, vying with Mexico City to be the world's most-populated metropolitan area.

In addition to Kassab's program, the government of Sao Paulo state, of which the city is the capital, plans to invest 45 billion reais from 2006 through 2025 to almost double subway and metropolitan train services. The city has 5 millimeters (0.2 inch) of subway track for each resident, compared with 10 millimeters in Mexico City and 50 millimeters in New York.

Resende forecasts a total collapse of Sao Paulo's traffic system within five years.

All-Day Jams

``If things continue to worsen as they have in recent years, jams will last all day by 2013,'' said Resende, the Dom Cabral transport and logistics researcher. Traffic flows are interrupted an average four hours a day, compared with two hours in 2005, according to the foundation.

Lino Belli Jr., an engineer, said he thinks twice before accepting invitations to events that take place between 6 p.m. and 7 p.m., the evening rush hour.

``Everybody avoids appointments at the critical hours,'' said Belli, 59.

When he has to catch a flight from the city's international airport, Belli allows five hours for the 25-kilometer drive to avoid ``being taken by surprise'' by traffic congestion, which intensifies when it rains.

Sao Paulo workers spend an average of an hour and 40 minutes a day commuting, according to a January survey of 1,500 people by pollster Ibope.

Pave Over Rivers

With about 85 percent of respondents to the survey considering traffic ``very bad,'' transportation has become a key issue in the run-up to local elections in October. Former Mayor Paulo Maluf, who is challenging Kassab's bid for re-election, has promised to pave over the city's two biggest rivers to build eight-lane highways.

Some companies have moved out because of the congestion. Mario Benedetti, the managing director of Ceratti, a ham and salami maker, said employees welcomed the company's 2004 decision to leave Sao Paulo for Vinhedo, 76 kilometers away.

``All our 150 workers and their families moved with us,'' Benedetti said. ``Every month, we gain an extra day for not having to waste time in traffic.''

Fiat SpA's Latin America president, Cledorvino Belini, based in Belo Horizonte, arranges meetings with clients, suppliers and colleagues at Sao Paulo's airports to avoid having to brave the city's traffic. Fiat led Brazil's auto sales in the first six months this year.

`Work From Home'

``The situation is getting really bad,'' said Belini, 59. ``More and more people will have to work from home'' to maintain productivity, he said.

Some benefit from the congestion. Vendors weave between vehicles to sell drinks and snacks to stalled motorists, while helicopter companies whisk the city's wealthiest residents above the clogged streets.

Sao Paulo's fleet of 440 helicopters counts as one of the three largest of any city in the world, according to the Brazilian Air Force.

Renting a helicopter for an hour costs about 1,400 reais plus 350 reais for each takeoff and landing.

``It's very elitist, but there is a cost-benefit relation,'' says Joao Carlos Pereira Dias, who owns charter company LRC Taxi Aereo.

To contact the reporter on this story: Heloiza Canassa in Sao Paulo at hcanassa@bloomberg.net

Last Updated: July 14, 2008 23:01 EDT