Concessions to boost flow of Midwest output through Brazil’s Arco Norte

The federal government is planning a series of railway, waterway, and highway concessions over the next two years that promise to ease the North of Brazil’s primary logistics deficit. The region covers 3.8 million square kilometers, equivalent to 45.2% of the national territory, and is home to 18.6 million people.

In 2024, the states in the region generated 6.3% of Brazil’s Gross Domestic Product (GDP), totaling R$738 billion. The Manaus Industrial Hub alone recorded revenue of R$205 billion last year. The region is also a major producer of minerals and agricultural goods, and its ports are essential for moving the harvest, accounting for 34.6% of Brazil’s international grain shipments last year.

Infrastructure for transporting people and goods, however, remains precarious. The federal paved road network in the region totals just 11,371 km. Climatic conditions, marked by heavy rainfall, and the sensitivity of the Amazon environment make road maintenance difficult. According to a survey by the National Transport Confederation (CNT), the North has the worst road network in the country, with 81.4% of highways rated regular, poor, or very poor in 2024.

Waterways are the region’s primary mode of transport. During the dry season, however, between August and December, major rivers lose around 40% to 50% of their transport capacity. During the severe droughts of 2023 and 2024, economic losses in Amazonas totaled R$2.9 billion, according to a study by the Federal University of Amazonas (Ufam). “The North is isolated from the rest of the country. Historically, the Brazilian State has been absent from the region,” says Augusto Cesar Rocha, a professor at Ufam and coordinator of the logistics committee of the Amazonas State Industry Center (Cieam).

The infrastructure deficit is not limited to logistics. The North has the worst sanitation indicators in the country, with only 23% of the population served by sewage collection networks, according to the National Sanitation Information System (SNIS), and it has the lowest availability of hospital beds. According to the Institute for Health Policy Studies (IEPS), there are 19 beds per 10,000 inhabitants. The region also accounts for just 5% of fixed broadband internet connections in Brazil and 6.5% of 5G mobile access.

According to a survey by the National Confederation of Industry (CNI), 74% of businesspeople operating in the region disapprove of local infrastructure conditions. “Where there is no infrastructure, there is no investment or economic activity,” says Rocha.

The Brazilian Confederation of Agriculture and Livestock (CNA) estimates that transporting grains by waterways and railways could reduce freight costs by 30% while also cutting greenhouse gas emissions. A single barge, for example, can carry 1,500 tonnes of grain — equivalent to removing up to 50 trucks from the roads.

“These projects serve the demands of agricultural producers in the Midwest, not the interests of the North,” says Rocha. “Brasília needs to engage more with the people of the region.”

Among the concessions planned by the federal government for the North are two greenfield railways. The Ministry of Transport intends to auction Ferrogrão in September 2026, a 933 km railway linking the agricultural region of Sinop (MT) to Miritituba (PA), where ports on the Tapajós River are located. The project has an estimated capex of R$33.3 billion. The other project is a 530 km extension of the North–South Railway (FNS) between Açailândia (MA) and Barcarena (PA), providing access to the Port of Vila do Conde, with a capex estimated at R$10 billion. The tender is expected in December 2026, with the auction scheduled for March 2027.

The ministry is also planning to tender, in April 2026, the contractual optimization of the Arco Norte Route, covering the BR-163 highway stretch between Sinop and Miritituba, with a capex of R$10.42 billion.

The Ministry of Ports and Airports (MPor), in turn, plans to concession three waterways in 2026: the Madeira River waterway, between Porto Velho and its mouth on the Amazon River; the Tapajós waterway, connecting Miritituba and Santarém (PA); and the Tocantins River waterway, from Peixe (TO) to Belém (PA).

Some projects, however, are controversial. During COP30 in Belém, Indigenous and riverside communities protested against the waterway concessions, which they believe involve severe river interventions, such as deepening riverbeds and blasting rock formations, including the Pedral do Lourenço on the Tocantins River. According to protesters, these works could harm fishing and community navigation.

Ferrogrão also faces resistance due to its socio-environmental impact in a still sparsely developed area. The project is being challenged at Brazil’s Supreme Federal Court (STF) for crossing 49 km of the Jamanxim National Park (PA), a federal reserve inhabited by Indigenous peoples.

Supporters argue that the projects are necessary to move agricultural production, which is expanding mainly in the Midwest and the North. The estimate is that, over the next decade, ports in the Arco Norte will account for more than 50% of Brazil’s international grain shipments. By sector, it will be impossible to handle this volume with the current infrastructure, requiring significant rail expansion and improvements to river navigability.

For Rocha, the concession of the Madeira River will not bring significant improvements and will remain dependent on rainfall cycles. He argues that the government should prioritize paving BR-319 to link Manaus and Porto Velho. “We cannot continue to rely exclusively on air and water transport,” he says.

According to Alex Dias Carvalho, president of the Federation of Industries of the State of Pará (Fiepa), rail and waterway projects will bring benefits. “They will expand the capacity to move grains and minerals through Pará’s ports and attract industrial and logistics investments to the region,” he says.

Carvalho also supports improvements in road infrastructure, such as completing the paving of the Trans-Amazonian Highway (BR-230), paving Pará stretches of BR-308 and BR-158, and duplicating BR-316, which links Belém to Maceió (AL). A study by the Amazon Environmental Research Institute (Imazon), however, warns that road improvements can trigger a vicious cycle involving land appreciation, land speculation, illegal logging, and deforestation.

A common occurrence is the emergence of secondary roads that expand illegal logging and deforestation. “Satellite data show that 90% of forest cover is destroyed within a 5.5 km radius of illegal secondary roads,” says Carlos Souza Jr., a researcher at Imazon.

For Rocha, the issue is not roads themselves, but the absence of the State. “Infrastructure today must be implemented in compliance with environmental legal frameworks and with the presence of the State to monitor, penalize, and correct irregularities,” he says. “We cannot punish the population, which needs infrastructure, because of the country’s inability to enforce the law.”

Source: Valor Econômico

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