Friday, September 02, 2016

Brazil seeks to kick-start railway construction

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Brazil’s interim federal government led by president Michel Temer is investigating how to revive the country’s ambitious new line construction program at a time of financial austerity by involving the country’s concessionaire rail freight operators.

One project under review is the planned 355-mile line linking Rio de Janeiro and Vitória that would serve major ports in the states of Rio de Janeiro and Espirito Santo. The government believes the project would only be viable if MRS Logistics and Central Atlantic Railway (FCA), which already have railway concessions in the two states, are willing to support it. The two states are now assessing whether to renew these concessions, on the condition that MRS and FCA become involved in the project.

Next year, the government plans to conduct an auction to find operators for the 1085-mile North-South Railway linking Palmas and Estrela D’Oeste, of which the section south of Ouro Verde is still under construction.

Next month, the National Land Transport Agency (ANTT) will complete a traffic demand study for the North-South Railway. The government intends to renegotiate contracts with VLI, Vale, Transnorestina and ALL by the end of the year to include operating rights over the North-South Railway. The government believes rail traffic will be higher if there are several operators on the line rather than a single concessionaire, and it may extend this model to other lines.

The project to build the Transnordestina railway from Eliseu Martins to Salgueiro with branches from there to the ports of Pacém and Recife/Suape has been under way for nearly 20 years. The government now wants the railway to be built in stages to give the project greater financial stability and to stay within budget and therefore plans to renegotiate the contract with Transnordestina. The objective is to complete the section to Pacém first as there are a number of legal and land acquisition obstacles to be overcome on the section to Suape. Transnordestina says the railway is currently 52% complete.

 

 

 

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