Pension funds will enter the high-speed train

Strategic parts in the financing of major infrastructure works from the government, pension funds from state-owned companies will participate on the high-speed train (TAV) that will connect Rio to Sao Paulo and Campinas. According to a government source, representatives from Funcef (Caixa Econômica Federal), Petros (Petrobras) and Previ (Banco do Brasil) have held meetings with the government and informed that they articulate the establishment of an investment fund to associate to the winner after the auction.

With the fund, such entities aim at entering with a share on the specific purpose partnership (SPE) that will build and operate the railway, with the budget of R$ 33.1 billion. After the auction, Empresa de Transporte Ferroviário de Alta Velocidade (ETAV) will join the group, with 33% of the capital.

The participation of funds is a tradition in major Brazilian investments. This year, Funcef purchased 5% of share in the consortium Energia Sustentável do Brasil (ESDB), which builds the Jirau power plant, in Rondonia. Pension funds participate directly and indirectly with 27.5% in the Belo Monte project, in Pará.

Meanwhile, the government follows and encourages conversations backstage between national and foreign investors. It is a common strategy in major projects in Brazil. The declared purpose is to monitor the movements from interested parties, but the actual strategy is to avoid lack of sufficient competition in the auction. The government adopted a similar policy on the latest hydroelectric power plant bids.

– We encourage the highest participation possible on the bid, but we are not forging major groups. We don’t believe the auction will be empty (without interested parties) – says the government source.

Representatives from seven countries are interested on the TAV – China, Japan, South Korea, France, Germany, Italy and Canada. Only Chinese have not manifested interest in having a Brazilian partner in the endeavor. The interested parties have talked to the Ministry of Transports and to the National Agency of Road Transports (ANTT). According to the source, only Koreans have indicated that they will truly participate on the bid. For this, they have the support of ten local companies, such as Hyundai and Samsung.

– We already have guarantee that a consortium will join the auction, and other groups are being established – says the source.

Project will join international and Brazilian technologies

For the government, the SPE formula for the high-speed train will be to associate the international technology – not existing in Brazil – with Brazilian endeavors. Andrade Gutierrez has talked to Japanese Mitsui and French Alstom. The German Siemens could associate to Spanish from Renfe and CAF. Alstom could join the Spaniards. The government’s interpretation is that each contractor shall be associated to a separate foreigner.

For the government, the talks will result in associations as of August. Since the deadline for presenting the proposals on Sao Paulo Stock Exchange is November 29, there would be three months to settle details.