Government may take over construction of the HSR, says Figueiredo

The federal government can take over on its own the construction of the first bullet train in the country, if there are no companies interested in the auction, according to Bernardo Figueiredo, chosen to preside over Etav, state-owned company created to monitor the work and that will be a partner in the project. The auction is expected to occur in the first half of 2013.

The high speed rail (up to 350 km/h) should connect the cities of Campinas, São Paulo and Rio de Janeiro. The estimated investment for the project exceeds $16 billion.

“The government has no doubt that it has to make the bullet train. We are doing a process to attract greater private participation so that the public effort to get the project started is as small as possible,” says Figueiredo, in an interview to G1.

“If the private sector has a hesitant attitude to the project – and if the government maintains this decision that it will make the project – Etav can increase its participation. It is being created exactly to be this instrument,” he added.

Figueiredo notes that, although there is the possibility of public investment in the bullet train, that decision has not been made by the government. However, he says he will maintain this position if the disinterest of the private companies in the auction happens again.

“Today the spirit [of government] is doing it, preferably with the private sector. But if it [the interest of companies] does not happen, I will do it as well. If the President or the Minister [of Transport] asks me, my position is this.”

The government tried to bid the construction of the bullet train in July last year, but the auction had to be postponed because no company had presented a proposal. Bernardo Figueiredo was the director-general of the National Land Transport Agency (ANTT – Agência Nacional de Transportes Terrestres) at the time and commanded the whole process.

In order to try to attract investors, the bid model was changed, which now envisages two auctions: one to hire the company that will provide the technology of the vehicle, and that will be a partner of Etav in the operation of the train; and another to choose the builders of infrastructure (tracks, stations, etc.).

The president of Etav believes that this time, however, there will be companies interested in participating in the two auctions.

Leaving from ANTT

Figueiredo left ANTT in February 2012, after his reappointment to the agency, appointed by President Dilma Rousseff, was rejected in a Senate vote. The veto was motivated by dissatisfaction of part of the government’s base of supporters with the treatment received by the Presidency.

The work of the bullet train that will connect Campinas, São Paulo and Rio de Janeiro has a cost estimated at $16 billion. The maximum rate expected for the trip is $96. It is expected to start operating in 2019.

Etav

The creation of Etav was approved by the Senate last year, but has not yet been formalized. Last week, the President issued a decree with the general guidelines for operation of the state-owned company.

Now it is necessary to choose the names of the four officers and six of the seven people who will comprise the board of directors of Etav – the seventh is Figueiredo. This should happen during a meeting on July 4, when the company will be formally established.

Figueiredo says his goal is for Etav to be a lean company, with less than a hundred (100) employees. His expectation is that it begins to operate in the second half of July effectively.

According to him, Etav’s first objective will be to help ANTT and streamline the process required to conduct the auction of the bullet train.

Technology transfer

The CEO of Etav defends the billionaire investment in the bullet train and the number of stations – in addition to Campinas, São Paulo and Rio, the vehicle should also have stops in cities such as São Jose dos Campos and Aparecida (state of São Paulo). Critics point out that, with so many stations, the vehicle will not be able to develop high speeds and therefore the investment is not justified.

Figueiredo notes that the idea is that the track has different transport services. On some trips, there will be stop at all stations. In others, the train will go straight from São Paulo to Rio, for example.

He also points out that one of the intentions of the government is to use the project to nationalize the cutting edge technology of high speed rails – the notice to bid will envisage the need for the transfer of such knowledge.

“If I make an infrastructure for a last-century technology, I will absorb last-century technology,” Figueiredo said.

Also according to him, along with the bid of the first track of the bullet train, Etav should perform studies for other connections with this kind of transport. Three have already been set by the government: São Paulo-Curitiba, São Paulo-Triângulo Mineiro and São Paulo-Belo Horizonte.