Government forecasts R$30 billion in rail investments over next 5 yearsFeb, 07, 2020 Posted by Sylvia Schandert
The Infrastructure Ministry expects R$30 billion to be invested in expanding the country’s rail network. The funds would be obtained through concessions. The information was given by Minister Tarcísio Gomes de Freitas, who participated on Friday (07/02) in in the 1st Sustainable Development Forum of Costa Verde, held at the Federal Rural University of Rio de Janeiro (UFRRJ), in the city of Seropédica (RJ).
“We will invest R$30 billion in railroads over the next 5 or 6 years,” he said. The first concession contract was signed last year and involves the North-South Railway, between Porto Nacional (TO) and Estrela D’Oeste (SP). Concessions of the West-East Integration Railway are planned for this year, which will connect Ilhéus (BA) to Figueirópolis (TO), and Ferrogrão, a project originating in Cuiabá (MT) and ending in Santarém (PA).
The government also plans to work for a legislative change that would allow an authorization scheme. It is a model in which the investor has more freedom than in the concession regime. “Currently we are not allowed to operate using the authorization scheme for railways although it is used for the port sector. The scheme opens new doors for the investor to take the engineering risk, so that he can own the undertaking of the works and own the railway as well as having the benefit of perpetuity and the freedom to set its tariff. This is important for those who take long-term risk and provide new rail investments in Brazil “, said Tarcísio.
According to a 2018 study by Fundação Dom Cabral, the road network is used to transport 75% of production in the country, whilst rail accounts for only 5.4%. The impact caused by the 2018 truck drivers strike exposed the country’s dependence on road transport and generated a public debate about the need to expand the railway network.
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