New rules define controversial subjects

Less than two months from this date, the new regulation milestone for the railroad segment shall be in force. After conducting a public inquiry with new rules for freight transportation on railroad, ANTT (National Agency for Land Transportation) shall submit the decree to public hearing, in April, before publishing the resolution. Two subjects are among the most controversial ones: right for passage and the new model designed by the agency to enable other companies to use infrastructure of third parties by paying a fee. Intrusion along the rails and network expansion are included in the subjects to be regulated. “Our schedule has provisions for approval of these resolutions until May 15,” says Bernardo Figueiredo, General Director at ANTT.

The agency enforces the segregation of roles, by creating two different players. On one side, the railroad network manager, and on the other side, the railroad operators. The manager would be in charge of the construction and administration of new railroads. The operators would be responsible for acquiring transportation capacity to freely move their freights, thus expanding the operation scope of the current concessionaires of railroads and permitting the entrance of new operators in the market.

ANTT is proposing a rule to oblige the company to define the exploitation plan for the entire network. “Today, a general goal is defined for transportation, but it is fulfilled in some sections only,” emphasizes Figueiredo. Also according to the general director of the agency, the new milestone will require the definition of goals for all the network sections.

The Director at ANTT estimates that 67.8% of the entire network (28,000 kilometers) is poorly used or inoperative. Today, the right for passage exists, but it depends on agreement between the companies. When this agreement is not achieved, the freight must be transferred from the user’s train to the operator’s train so as to proceed running on the concessionaire’s network. The right for passage includes the authorization, from the railroad concessionaire, so as to enable that a user having its own train to run on the concessionaire’s network by paying a fee.

“If the 28,000 kilometers were used in full operation, the scenario would be highly productive. Average costs would drop in function of duplicated production, reflecting on freight and product costs to the consumer,” states Luiz Henrique Teixeira Baldez, Chairman of ANUT (National Association of Freight Transportation Users). He comments that many times there are railroad sections which utilization is demanded by the user, but he is not authorized to, thus obliging him to use roads in bad conditions. The strongest criticism of the government about the current model of concessions refers to the obstacles for network integration, due to the fragmentation of sections managed by different operators. This creates difficulties to users and limits the access of freights.

One example that illustrates very well this scenario is the port complex in the city of Santos, where the railroads that reach its surroundings are obliged to negotiate with MRS, which is the concessionaire of the 16-km “horseshoe” track that provides access to both banks of the major port in Latin America. According to Figueiredo, the exclusivity in each section shall be subject to the goal for volume transported, which from now on, shall be defined by each concessionaire. “The concessionaire will have autonomy to define the goal, but the items not fulfilled shall be free to be used in the right for passage, provide that the concessionaire is remunerated,” he explains.

In addition, ANTT may recover the control on sections considered as inactive or abandoned, which to this date depended on the volunteer return by the concessionaires. “We are establishing a rule that facilitates the fulfillment of this contractual obligation,” he ensures.

Teixeira Baldez, at ANUT, comments that the resolutions received a series of suggestions and adjustments made by several entities in the industry. “The new regulation milestone is more than necessary to balance the relations between government and users. Therefore, we fully support the resolutions included in public hearing by ANTT,” he states.

The chairman at ANUT believes that, from this date on, the user shall be able to negotiate with other carrier, thus achieving better prices. “Today, this condition does not exist and the user is a hostage of the concessionaire. The new regulation milestone clearly defines who will manage the infrastructure and who will be the railroad operator. There is a company to manage the business and several companies operating. I choose the cheapest fare and use the same track that the country has constructed,” he summarizes.