Government is considering cheaper option to replace the HSR

Experts and government’s technicians claim that the High-Speed Rail (HSR) is replaced by a medium-speed train linking the cities of Rio de Janeiro, São Paulo and Campinas. Such a model could reduce the project cost by half. Besides being a cheap venture, there would be more competition, since a bullet train requires high technology and specific infrastructure, with domain restricted to a group of six companies in the world.

To get an idea of cost, market data on the initiative of the government of São Paulo to implement five medium-speed tracks linking the metropolitan regions of São Paulo to the cities of Campinas and Santos (160 km), is $3.81 billion. The project will be performed by a Public-Private Partnership (PPP) and it is in the initial phase. The cost of the São Paulo-Jundiaí track, which is more advanced, is estimated at $1.24 billion. The HSR is budgeted by the federal government at $15.74 billion.

A medium-speed train linking the cities of the Paraíba Valley could relieve the Dutra highway and stimulate regional development, said a technician from the government.

For the lawyer Rodrigo Matheus, expert in public service and bidding, the alternative should be taken into account due the recent questions about the quality of the public service and the issue of urban mobility. It is a political decision.

He said he did not believe that the HSR auction, which was postponed for a year at least, will be held still in the current government, near election, because the entire execution of the work will be performed by those who will take the next government. Therefore, he said, it makes no sense that the Empresa de Planejamento e Logística (EPL) develops the HSR executive project, which will cost $372.94 million.

It is not reasonable. Not because the cost of the executive project, but because the political scene, which is complicated, he highlighted.

The risk of moving forward with the project is huge, added Henrique Motta Pinto, an expert in regulatory law from the law firm Sampaio Ferraz.

Cost of the executive project has value of 2008

He recalled that interested parties did not appear even after the government has assumed the entire risk of the HSR infrastructure and eliminated the criterion of the lowest rate from the bid.  He also pointed out that the Brazilian Court of Audit (TCU) approved the economic viability studies of the concession with reservations.

According to the EPL, the estimated cost of the executive project was calculated based on the complexity of the work. According to the company, an international standard executive project costs between 2% and 5% of the total value. The price considers values of 2008, when the project was estimated at $11.60 billion.

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