Federal Government approves $268.40 million for Transnordestina

After many negotiations, the federal government released last month $268.40 million related to the agreement for the construction of Transnordestina, 1,728-km railroad that will pass through the states of Pernambuco, Piauí and Ceará and will reach two ports – Suape (state of Pernambuco) and Pecém (state of Ceará).

The transfer, coming from the Northeast Development Fund (FDNE – Fundo de Desenvolvimento do Nordeste), the main funding source of the project, facilitated the resumption of work in some stretches of the railroad, owned by Companhia Siderúrgica Nacional (CSN).

According to Valor, the federal government and CSN reached a consensus in February to review the predicted values, but the agreement has not been signed yet. According to familiar sources with the talks, the formalization depends on a few details.

Under the new agreement, the project value increases from $2.41 billion to $3.35 billion, an adjustment of 38%. The first figure announced for the railroad, in 2005, provided $2.01 billion.
Before the review, the contract provided that 49.3% out of the $2.41 billion would be financed through FDNE’s resources. Other 15.2% would come from the Northeast Investment Fund (Finor). Both are federal funds.

CSN would come with 25%, half from his own cash and half via BNDES financing. Transnordestina Logística, a subsidiary of CSN, would get other 41.5% from BNDES and just over 3% from Banco do Nordeste. The rest would come from a participation of the state-owned company Valec.

The expectation of CSN, company owned by the entrepreneur Benjamin Steinbruch, was that the new agreement would change the ownership structure of the project, but the information has not been confirmed.

In addition to the values, the deadlines for completion of the works, which are being performed by Odebrecht, were changed. The new forecast for the stretch between Eliseu Martins (state of Piauí) and Suape is 2015. The connection between Salgueiro (state of Pernambuco) and Pecém was set for 2016.

When contacted, CSN did not comment on the matter.