Article: Hello Rio, there is still time

*By Gerson Toller

The State of Rio de Janeiro is faced with a great opportunity to increase its industrial estate: next September, the Secretary of Transportation shall be opening an international tender for the purchase of 60 four-coach train units for commuter train operator Supervia. Next, the same company (now controlled by Odebrecht Transport) shall order another 30 trains, also with four coaches, giving a total of 90 trains or 360 coaches. This is an order that must not be sneezed at.

We could easily produce these trains in the state of Rio de Janeiro, with Brazilian labor and supplies. Brazil has had the technology, the labor and the capacity to produce electric trains since the 1970s, this having been done by the new defunct Santa Mathilde Industrial Company in the upstate fluminense town of Três Rios. If not all, at least a part. What the State of Rio de Janeiro must not do – or, better, should not do – is to continue buying trains, wrapped in packaging, exported from Korea, as they did in 2005, or China, as they did in 2008.

When the Government of the State of São Paulo made a similar purchase, in 2008, for the São Paulo State Commuter Train Company (CPTM) and the São Paulo Metro, they decided to create, as part of the tender, a preference margin of 15% in favor of equipment made in Brazil. This was enough to make the tender winner, a Spanish company then absent from the country, to build a brand new factory in the city of Hortolândia, near Campinas, a plant which now employs 1,300 people and also produces 65% of the value of the trains. There are also 20 Spanish technicians working at the plant to train the Brazilian staff. All these shall be returning to Spain shortly.

Both in São Paulo and in Rio, the purchase is financed by the World Bank, whose rules mention the need for an international tender but also allows the 15% preference. However, the Government of Rio does not want to hear about this preference, despite the insistent pleas made by the national industry. They prefer to do business as cheaply as possible, which means doing business with China, an important supplier of electric trains, umbrellas and Christmas lights, and then keep the change of the World Bank financing to purchase more trains later on.

Over the last 30 days, we have seen announcements of the construction of four railway material factories in Brazil: one to produce locomotives in Sete Lagoas (Minas Gerais), one to produce electric trains in Araraquara (São Paulo), one to produce brakes in Itupeva (São Paulo) and even a unit to produce monorails in Campo Grande (Rio de Janeiro). The country is going through a real renaissance of railway transport, boosted by the saturation of other means of transport, by the environmental issue and also the technological advances in the construction of railway materials. This is not just a Brazilian phenomenon, also happening in China and in the United States.

The ninety trains of Supervia (one batch of 60 and one batch of 30) are worth close on 900 million US Dollars, a cash volume which is more than enough to invest in a new industrial plant in the state. If nothing is done by the Government, then all this cash, and also the jobs that it shall generate, shall remain in China, more exactly inn Changchun, where the Changchun Railway Vehicles Company is producing the 34 trains sold two years ago, also to Supervia.

I have nothing against Chinese trains. We have not started using them yet here in Brazil but, unless proven otherwise, they are as good as any others (I hope). Hence, if we buy so much from them, why do not they come over here to produce the units? Was not this how the Brazilian automotive industry started?

There does not seem to be any objection by the Chinese. They are already signing protocols of intentions with Brazilian industry, preparing possible joint ventures. Similarly, there would be no reservations by the World Bank, which would accept a 15% preference for manufacture in Brazil. The State Government can still turn the game around if they see the opportunity.

*Gerson Toller is the executive director of the Revista Ferroviária magazine.