Article: There is no plan B

*Gerson Toller

In the nest August, the federal government will held a new attempt to find interested for the HST implementation. The auction, which will define interested suppliers for trains and systems, begins on 13th of that month, this time with further chances, now the process has grown up. Suffering with the lack of interest in the first auction, in July last year; prevented from opportunists, such as Italplan, whose director, Moreno Gori – we know now – is looked for the Federal Police; and this time counting with a more competent organization aimed at railroad project organization, EPL, we are far away from the categorical statements of the chief of staff, Dilma Rousseff, when she declares, in broadcasting interview, that the HST will be built with no public money. We are got real.

Railroad works may, indeed, count with private initiative participation, as long as the government assumes the largest part of the costs – i.e. civil works. That’s what happened in the first and most successful metro PPP in Brazil, signed in 2006, of which resulted the Line 4 of the Metro of São Paulo. The government built – is building – the infrastructure, with the cost of $ 1 billion, and the Via Quatro consortium, formed by CCR, Montgomery Participações (i.e. Odebrecht), Mitsui, Benito Roggio and RATP, is providing and operating the trains and systems, with the cost of $ 500 million. The first phase of Line 4 is operating since May 2010, serving the population of São Paulo with its modern pilotless trains, which transport around 700 thousand passengers per work day, and will get to 1 million by the end of the project. The success was recognized by International Finance Corporation, of World Bank, as the best PPP in Latin America.

We get it, and now, on the second attempt, the work costs – and the engineering project – will remain to the government. Next year, the consortium of construction companies responsible for the work will be contracted and paid by the Union. For the attendants of the first auction, now in August will be, as in the case of Line 4 of the Metro of São Paulo, the provision of trains, systems, control centers, shops and – additionally – acoustic barriers in urban areas. The Sociedade de Propósito Específico created with that purpose will have favorable conditions, Incentive Special Regime and, during the 40 years of concession term, ICMS, PIS and Cofins exemption, charged over the income. SPE will have EPL participation in 45% of its capital.

The government expects that these features will constitute enough incentive to ensure the second auction’s success. Remain the demand risk and the requirement to pay the grant value – at the minimal price of $ 5 billion in trimester parcels throughout 40 years -, being this value to decide the winner of the first auction. But nothing prevents that, until August, new additive is adopted and that such conditions are mitigated. As says Bernardo Figueiredo, CEO of EPL, there’s no plan B for HST: it is do or do.

*Gerson Toller, Journalist, Director of Revista Ferroviária