West-East Integration Railway receives legal go-ahead

TCU (the federal accounting court) released the concession process for the West-East Integration Railway (FIOL) between the cities of Ilhéus and Caetité, both in the state of Bahia, which will be executed through a private contract. The expectation is to publish the announcement later this year so that the bidding takes place in the first quarter of 2021. Private investments of R$ 3.3 billion are forecast in addition to the creation of 65,000 direct, indirect, and income-effect (when a job is generated from transforming the income of workers and entrepreneurs into consumption) jobs.

The FIOL works, supervised by Valec, are divided into two segments: FIOL 1- between lhéus and Caetité and FIOL 2 – between Caetité and Barreiras (also in Bahia). Section 1, which will be granted, will be 537 km long and should consolidate an ore flow corridor in the south of the state of Bahia (Caetité and Tanhaçu), in addition to facilitating the transport of grains from the west of Bahia, connecting to an important port complex to be built in the vicinity of the city of Ilhéus. The studies foresee a transported load of 18.4 million tons in the first years of operation, which could reach 33.8 million tons by 2054.

According to the public bid notice, the term of the sub-concession will be 35 years. The remuneration of the sub-concessionaire will be based on the receipt of the transportation tariff, the right of way tariff, the mutual traffic tariff, the revenues arising from ancillary operations, and the exploration of associated projects.

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