Court grants approval for Port of Santos railroad privatization model

The Brazilian Federal Court of Accounts (TCU) approved, on July 6, the privatization model of the Internal Railroad of the Port of Santos (Fips), which the Santos Port Authority (SPA) had filed for approval at the beginning of the year. With the green light from TCU, SPA should be ready to launch a public call for parties interested in obtaining a share of the track lines in the third quarter.

The Company is working to sign the contract later this year so that works can start in 2023. The Fips is essential to expand the railroad’s capacity within the Port of Santos, which is already close to saturation.

That will be an unprecedented associative contract in which those qualified will share costs and operations. This is an innovative business opportunity model provided for in the State-owned Companies Law (nº 13,303, 2016). The TCU plenary seconded the technical evaluation that the project would eliminate a bottleneck for the port.

Fips will require investments estimated at R$ 891 million in the first five years. Currently, the annual railway capacity in the port complex is limited to 50 million tonnes compared to a projected total of 115 million tonnes for the next 5 to 10 years for the railways that flow into the complex (MRS, Rumo, and VLI).

The planned investments will separate the road-rail crossings and ensure the fluid flow of trains, increasing the efficiency of the operation. One of the main gains will come from constructing a balloon loop in the Outeirinhos region.

The track “carousel” will be the first on the right bank of the port. It will allow trains transporting grains to reach export terminals to efficiently complete a roundabout and capture solid bulk landed in the fertilizer cluster. Today, return freight operations are not satisfactory because – in the absence of a balloon loop – trains have to maneuver for hours, draining the system’s efficiency and making it anti-competitive.

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