North-South Railroad concession contract signed

This Wednesday (07/31), President Jair Bolsonaro, Minister of Infrastructure Tarcísio Gomes de Freitas, and Director General of ANTT (National Land Transportation Agency) Mario Rodrigues Junior, signed with Rumo SA the North-South Railroad concession contract for the central and southern sections of the  Railway. Also attending the event, in Anápolis/GO, was the governor of Goiás, Ronaldo Caiado, the mayor of Anápolis, Roberto Naves e Siqueira, as well as parliamentarians and executives of the concessionaire and the infrastructure sector. The signing is due to the auction held in March by ANTT (National Land Transportation Agency).

The stretch granted is located between Porto Nacional/TO and Estrela D´Oeste/SP (1,537 km) and is divided into two sections: central, between Porto Nacional/TO and Anápolis/GO, with a length of 855 km; and south, covering the Ouro Verde stretch of Goiás/GO and Estrela D’Oeste/SP, with a length of 682 km.

The central branch is completed and operational and available for commercial rail freight. The authorization to open traffic was obtained through ANTT resolutions No. 4,363/2014 and 4,596/2015, and operating license No. 1,240/2014, issued by Ibama. The start of the operation is expected to occur before the end of 2019. The southern section, which connects the states of Goiás, Minas Gerais, and São Paulo, has the Installation License No. 1,152/2014, also issued by Ibama. The stretch has 95% of the works completed. According to the contractual rules, the concessionaire has two years to complete the interventions and start operations in 2021.

“We will create competition and the participation of rail mode will go from the current 15% to almost 30% in eight years. We will start to see the train pass with a stacked container leaving Goiás and going to São Paulo, and in the opposite direction. In the future, we will leave Manaus Free Zone and deliver the cargo to Porto Alegre. We will connect Brazil through rails. The country will grow because it has a vocation to be big,” said the minister during the event. The railway is considered the backbone of the Brazilian rail system and one of the main projects for the flow of agricultural production in the country.

Auction

Rumo S.A won the auction for R$2.7bn, representing a 100% premium over the minimum bid of R$1.3bn. The concessionaire will operate the stretch in question for 30 years. Compensation will be received upon receipt of the transportation fare, right of way fare, mutual traffic fare, revenues from ancillary operations, and the exploration of associated projects. The contract consists of the exploration of the infrastructure and the provision of the public railway service, and ensures the maintenance and conservation of the infrastructure throughout the concession period.

Straight through

To allow access to the ports of Santos/SP and Itaqui/MA, the operating conditions were established, as well as the maximum tariffs related to the right of way in the adjacent concessions, by signing additional terms to existing contracts: Rumo Malha Paulista, MRS, FNS (northern section), Carajás Railway, and Transnordestina Logística Railway.

Demand

The estimated total demand for the North-South Railway, both in its own network and in third parties, is 1.7m tons for 2020, reaching 22.7m tons in 2055. Among the main products to be sold on the railroad are general and industrialized cargo from large Paulista poles to consumer centers such as Goiânia/GO, Brasília/DF, Palmas/TO, and Imperatriz/MA. In the opposite direction, a significant volume of grains from Tocantins, Goiás, and Mato Grosso will be moved for export from the port of Santos.

Source: Ministério da Infraestrutura

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