LLX negotiates railroad access to porto do Açu

Ferrovia Centro-Atlântica (FCA) and MRS concessionaires and LLX Logística, of the EBX group, negotiate with the government a solution to implement, on the north coast of Rio de Janeiro, a 345-kilometer long railroad line with estimated investments of R$ 1.2 billion. The region has a section of the FCA network that is abandoned. With the project, this section can be recovered to transport cargos of several companies. One of the companies with the highest interest in the new railroad line is LLX, who develops porto do Açu, in São João da Barra, in the north part of the State.

The implementation of a railroad in the north part of the State is strategic so that LLX is able to develop the port, which has iron ore as main cargo. LLX president, Otávio Lazcano, trusts that the railroad will be completed by the end of 2012, beginning of 2013. According to him, LLX and other companies will ensure the transport demand of the railroad. He said that from 2014 porto do Açu will be able to receive 340 million tons of cargo per year. Part of this volume will be transported on the railroad. The estimation is that, during a first stage, the railroad in the north part of the State could bring steady cargo contracts of 15 million tons per year.

As a concessionaire in the region, FCA – which belongs to Vale – has a proposal to transform a metric gauge (narrow) section with approximately 230 kilometers between Itaboraí and Campos dos Goytacazes, in Rio de Janeiro, in wide gauge to allow connection with MRS, from Minas Gerais. A third rail would be implemented until Campos, from where a 45-kilometer branch will lead to Açu. The connection of MRS and FCA will also require the re-construction of a 20-kilometer section between Ambaí and São Bento, in Rio de Janeiro, in the FCA concession area, and interventions between São Bento and Visconde de Itaboraí, also in Rio, a section of 50 kilometers that belongs to the Federal government and the State of Rio de Janeiro, which has passenger train operations.

Negotiations also go through state-owned Valec, Engenharia, Construções e Ferrovias, concessionaire of railroad 354. EF 354, called Transcontinental, is a wide gauge railroad project planned to go through the north coast of Rio de Janeiro and then follow, via Minas and Middle West, to Acre. And from there to the Pacific, in Peru.

Delmo Pinho, State sub-secretary of Transports, said that the government of Rio de Janeiro executed a study that estimated R$ 1.2 billion as the cost to implement the railroad from Rio de Janeiro’s metropolitan area to Açu. This figure must be reviewed by a study contracted by FCA. Pinho criticized the concessionaire for having abandoned several State lines.

During last week, LLX, FCA, and MRS representatives met with Agência Nacional de Transportes Terrestres (ANTT – National Terrestrial Transport Agency) to discuss the project of the railroad line in the north of the State of Rio de Janeiro. A new meeting is foreseen for the next month, as verified by Valor. ANTT’s general director, Bernardo Figueiredo, said that at short term a protocol will be signed to execute the project, which will involve private initiative. “We are discussing the project from Valec’s point-of view, which is the concessionaire for the wide gauge line [on the north coast of Rio de Janeiro”, said Figueiredo. The protocol must be signed by the Ministry of Transports, the State of Rio de Janeiro, and Valec.

Figueiredo said that the conversation between FCA and Valec has started, and the state-owned company could build line EF 354 using the domain zone of Vale’s concessionaire. The agreement would allow reducing the investments required. He recognized that if there is no agreement, Valec could build EF 354 in a different zone than the one detained by FCA. Figueiredo said that there is no formal proposal from FCA to ANTT to repair the section of the concessionaire in the north part of the State of Rio de Janeiro.

“We have a TAC”, said Figueiredo, referring to the Conduct Adjustment Term instrument. A source involved I the negotiations said that FCA has TACs that were not observed and involve very high investments, and that the discussion would require FCA to concentrate the investments foreseen in the adjustment terms of the line in the north part of the State. FCA said that there is a formal proposal made to the Ministry of Transports and ANTT to revitalize the section in the north part of the State within a project considered feasible. Regarding the concession of EF 354, the company states having no knowledge of the proposal.

Vale’s logistic commercialization director, Marcello Spinelli, said that FCA contracted an engineering study to detail the project. According to him, FCA has agreements regarding the project with MRS. MRS’ president, Eduardo Parente, said by email that negotiations are evolving well and that the discussion of a specific operational contract with FCA is in an advanced stage.

We are waiting for the clients to define the volume with which they are willing to compromise to complete accounting for the division, wrote Parente. According to him, the division of the investment is not accounted for yet. One possibility would be FCA answering for the entire investment, which would result in more expensive passage rights (toll) for MRS in the operation stage.

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