Concession of new Brazilian railroads should be of 35 years

To make railroad projects more attractive and try to ensure the participation of entrepreneurs, the government decided to expand from 30 years to 35 years the concession period of the stretches that will be bid this year.

The start of the privatization process will be given next week, when the initial version of the notice to bid for the first stretch to be bid will be published, the CEO of the Empresa de Planejamento e Logística (EPL) Bernardo Figueiredo announced yesterday.

The first stretch of railroad that will pass into the hands of the private sector connects the port of Vila do Conde (state of Maranhão) to Açailândia (state of Pará).

For the government, this is a strategic handling point of Brazilian production, especially agriculture and mineral extraction. The notice to bid of the track, which is relatively short, will also serve as a test for the railroad expansion model proposed by the Palácio do Planalto. It is an isolated track, in the northern part of the country. We will use it as a pilot for this more intensive discussion with the market, Figueiredo said.

The CEO of the new state-owned company had already admitted to Estado de S. Paulo, two weeks ago, that the concession period of the railroads could be extended for five years. The method to extend the contract period in order to attract the interest of the companies had already been done in the highway package. The government decided to expand from 20 years to 25 years the period of operation of the roads that will be passed to the private sector.

Notices to bid

In this area, Figueiredo admitted yesterday that the notices to bid of Highways 116 and 040, both in the state of Minas Gerais, will be published in late May or early June. It was expected so far that these documents were released in April.

The Highways 116 and 040 will undergo a deeper reformulation, he justified. The notices to bid of the other roads that will be bid should be released between late April and early May.
Figueiredo stressed that the railroad program was launched by President Dilma Rousseff in August and that the first four months were used for preparation of studies. On the highway, we have done an intensive dialogue with investors, those adaptations that were released earlier this month was the product of this dialogue. Let’s start now at the railroad part, with the first results of the studies, he said. He added that some items have already undergone revision, but, at least for now, there is no major revision to be adopted.

Figueiredo attended yesterday, in the Itamaraty Palace, a round of selling infrastructure projects to ambassadors from various countries. It is important we have foreign participation, since we do not have here in Brazil either the entire ability to invest or the entire ability to perform, so we will have to rely on the favorable environment that exists out there to bring companies to join the program, he argued.

Presentations like that are planned in New York, London, Tokyo and Singapore. The government is negotiating to make these presentation rounds of investment packages in logistics also in China, Germany and Poland.

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