Railway legal framework enables authorization regime to reduce incertainities for private investors

President Jair Bolsonaro issued a provisional measure for the new legal framework for rail transport. The initiative’s main innovation is the authorization regime, which now coexists with the concessions model.

The authorization regime, already used in other countries like the United States, reduces uncertainties for the private investor interested in building new railways and taking advantage of idle stretches. The contract is already used in the exploration of infrastructure in the telecommunications, electricity, port, and airport sectors. With it, the private investor becomes the “owner” of the enterprise and is not required to return it at the end of a specified period of contracting.

The MP was even announced by the Minister of Infrastructure, Tarcísio Gomes de Freitas, as an alternative to the bill with similar content by Senator José Serra (PSDB-SP). The strategy would be used initially to develop Ferrogrão, a 933-kilometer railway between Sinop (MT) and Miritituba (PA), which has become an agribusiness bet to reduce logistics costs in the country’s largest producing region.

Now, the major project that the government intends to make available via the authorization regime is the extension of Rumo’s Malha Norte (formerly Ferronorte), which is currently in Rondonopólis and would gain another stretch to reach Lucas do Rio Verde, both in Mato Grosso.

In addition, other projects have already been presented to the Ministry by potential investors and total more than R$ 20 billion, such as Sete Lagoas (MG)-SãoMateus (ES), which seeks to supply a new private port, Pirapora-Unaí (MG), and a branch that would run from Vale’s Carajás Railroad (EFC) to a new projected port in Alcântara (MA).

Source: Valor Econômico

To read the full original article, visit the link:

https://valor.globo.com/brasil/noticia/2021/08/31/marco-legal-das-ferrovias-preve-novo-modelo-de-contratos.ghtml

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