Lack of license prevents works for Ferrovia Centro-Oeste

The Government even tried, and the Ministry of Transportation claimed, at the beginning of the month, that the work for the Ferrovia de Integração Centro-Oeste (Fico) would start before the year ended. But they were postponed to 2011.

The railroad that promises to change the face of grain distribution in Brazil is one of the works conducted by Valec, a state-owned company reactivated to expand the national network of cargo trains. The delay in the project, states the company president José Francisco das Neves, is due to the lack of prior license, a document yet to be issued by the Brazilian Environmentl Institute (Instituto Brasileiro do Meio Ambiente (Ibama)).

According to Neves, the project development company Enefer is already implemented in the city of Água Boa (MT) to detail the execution of the railroad’s basic and executive project. “Unfortunately, we were not able to meet the deadline expected, but we will certainly kick off works until April 2011,” stated Neves.

Fico will be executed in two phases. The first one starts in Campinorte (GO), where it integrates to Ferrovia Norte-Sul. From this point, the railroad will cross the State of Mato Grosso until arriving to Lucas do Rio Verde, on a stretch of 1,040 km. In this phase, the investment expected is of R$ 4.1 billion, a sum that will come from the Growth Acceleration Program (Programa de Aceleração do Crescimento (PAC)). The second stretch of the work, budgeted in over R$ 2.3 billion, will start on Lucas do Rio Verde and head to the city of Vilhena (RO), adding another 598 km of network.

When it is ready, says Glauber Silveira da Silva, president of the Association of Corn and Soy Producers in Mato Grosso (Associação dos Produtores de Soja e Milho de Mato Grosso (Aprosoja/MT)), Fico will cheapen in up to R$ 1 billion the freight cost currently paid by the region’s producers. This impact, however, will not be felt immediately by businessmen. “The railroad is expected to be concluded in 2014. Before thinking about the railroad, we are counting on the conclusion of the highway BR-163,” says Silva.

The federal highway connecting Cuiabá, capital city of Mato Grosso, to Santarém, in Pará, started being built in the late 1960s and there is still 40% of it to be finished. The work conclusion, which includes paving 1,055 km of highway, has a total investment of R$ 1.4 billion and is expected for December 2011.

According to Maurício Tonhá, mayor of Água Boa, a city to be crossed by Fico, the freight cost currently to transport one ton of soybean from the region to the Santos or Paranaguá harbors varies between R$ 150 and R$ 200. “I believe that will have a gain of competitiveness of 30% to 50% with the arrival of the railroad, since we will begin to have access to other ports,” comments Tonhá. “Depending on the destination of the merchandise, we may access the port of Itaqui, in Maranhão, or Vila do Conde, in Pará.”

At the peak of the works, Fico shall involve labor force from up to 20,000 workers. The railroad is the first part of an ambitious project from Valec, the so-called Ferrovia Transcontinental (EF-354), planned for having 4,400 km of extension. On the eastbound direction, the network goes to the Southeast region, crossing Distrito Federal and Minas Gerais, until reaching the Rio seaside. In the westbound direction, it crosses part of Rondonia to Acre, reaching the border with Peru.