According to estimates, Brazil rail transport market will experience a dynamic increase over the next five to ten years; as the volume of raw materials for export will increase, it will stimulate the increase of demand for rail infrastructure construction to facilitate freight connection to main ports.
If the Government continues to invest in railways at the same extent, the private sector will also commit to invest in this economic sector. The concessions announced by the Brazilian Government for rail infrastructure ever since 2015 will facilitate the premises for development of different types of products, such as rolling stock, train control systems, signalling and communications, railway equipment, new freight transport cars, rolling stock maintenance equipment and spares. It is estimated that the post-sale market (rehabilitation, maintenance and rolling stock repair, infrastructure reconstruction and maintenance) will increase as the rail freight sector develops with the construction of several dedicated railways which will later require maintenance. The international railway leaders have already invested significantly in Brazil’s production factories and are therefore waiting for a high rentability level. According to the Government’s estimates, rail sector investments – through rail concession dedicated programme – could amount to USD 28 billion for the construction, modernisation and maintenance of 7.500 km of railways to be under concession. At the middle of July, the Brazilian Government confirmed it would open at the middle of 2018 the tender for a new concession for the central-southern section of the North-South Railway (FNS). Bidders will have to officially confirm their participation by the end of 2017. According to the state secretary for Land and Inland Waterways Transport from within the Ministry of Transport, Luciano Souza Castro, the concessionaire will have to invest around BRL 3 billion (USD 907,7 million) in the 30-year concession financed by Brazil’s National Development Bank (BNDES). ”As it is a railway section in the final phase of implementa-tion, most investments that sub-concessionaires have to make also refer to rolling stock procurement”, Castro says. The 1,537-km railway, part of the North-South Railway, will be tendered for a period of 30 years with the possibility to extend it for another 30 years. The 855-km Porto Nacional – Anápolis section is completed, while the remaining 682 km connecting Ouro Verde (Goiás) to Estrela D’Oeste is under construction and currently 90% completed. As a project concessionaire, Vales state-owned company is leader in the construction process. Works are expected to be completed in the first half of 2018. Under the sub-contracting process, the successful bidder will be in charge with the investments, as well as with the procurement and exploitation of the rolling stock. The economic offer of bidders will be analysed according to the highest value of the subsidy. The North-South Railway is designed to promote national integration and to reduce transport costs to minimum through its connections with new railway infrastructure, but also to existing ones. The North-South Railway is believed to be the backbone of the Brazilian railway network and one of the main projects of the South-American state aimed to stimulate agricultural production.
by Elena Ilie
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