Brazil revives its investment undertakings in railway projects


Brazil is the fifth largest country in the world and occupies almost half of South America, at 47%. With 8,515,767 square kilometres, a border area of ​​15,735 kilometres, long with 7,367 kilometres of coastline has an outstanding geostrategic position in the area.

It is ranked first in the region in terms of population, with 206,101,000 inhabitants and is amongst the ten largest economies in the world. Hence, the Government is highly aware that it is of the utmost urgency to provide a significant boost to infrastructure. Following the economic downturn of recent years, a gradual resumption of growth is forecast, which began to register in 2017 (0.5%), according to the International Monetary Fund, backed up by government measures and by the increase in investment.

In spite of its magnitude, the railway transport network, of 30,600 kilometres, is small to service all this sizeable territory. A country of these dimensions should have at least 50% more capacity than the current one to make this type of transport competitive compared to road networks. However, the construction of another 17,200 kilometres is already planned.

The lines are distributed into blocks according to their geography. The most developed is the North-South branch, while the rest of the regions are very poorly linked together. The new projects are already made using international gauge width (1435 mm) yett while these works or reforms are carried out, different types of track coexist: narrow (1000 mm); wide (1600 mm) and mixed. The average commercial speed is 25 kilometres / hour, due, especially, to the numerous level crossings. According to data from the National Association of Railway Transporters (ANTF), one has been placed every 1.5 kilometres.

Currently, long distance connections are more focused on freight services. In terms of transported cargo, this reached 503.9 billion tons per kilometre in 2016. That said, passenger levels are almost negligible (1.190 billion in 2016). In this case, mobility is concentrated on short-distance urban and interurban routes.

Sectorial Structure

The main organisations and institutions of the rail freight sector are the Ministry of Transport, on which the National Department of Transportation Infrastructure (DNIT); the National Agency for Land Transport (ANTT), the Planning and Logistics Company SA (EPL) are dependent, and ValecEngenharia, Construções e Ferrovias SA, which is entrusted with the tasks of construction and operation of the railway infrastructure. The latter is also responsible for the implementation and operation of several rail lines. In terms of passengers, the National Land Transport Agency (ANTT) and the Ministry of Cities, with federal powers in urban mobility, are worthy of special mention. Respondent to it are the companies CBTU-Companhia Brasileira de Trens Urbanos and the TRENSURB-Metro Company of Porto Alegre.

Other relevant associations and organizations are the Brazilian Association of the Railway Industry (ABIFER), the National Association of Passenger Transporters on Railways (ANP Trilhos), the National Association of Railway Transporters (ANTF), the National Association of Public Transport (ANTP).

With regards to commercial operation, in the field of freight rail, since 2012, 29,075 kilometers have been assigned to private tender operators. América Latina Logística SA (ALL), Estrada de Ferro Carajás (EFC), VALE SA, Estrada de Ferro Paraná Oeste SA (FERROESTE), Estrada de Ferro Vitória to Minas-VALE SA (EFVM), Ferrovia Centro Atlântica SA (FCA), Ferrovia Norte Sul – VALEC SA (FNS), Ferrovia Tereza Cristina SA (FTC), Ferrovia Transnordestina Logística SA (FTL S / A) and MRS Logística SA In long distances for passengers there are two private companies in charge of this type of transport, both operated by VALE: Vitória / Belo Horizonte-Estrada by Ferro Vitória-Minas (EFVM) and Parauapebas / São Luis-Estrada by Ferro Carajás (EFC).

Investment plans

Aware that this sector is key to the development of the country, from the Federal Government several plans have been devised to boost the railroad with which provides a cycle of investment in new infrastructure construction and expansion or improvement of existing. Many of these projects have been raised with the collaboration of the private sector.

To achieve these aims, the Growth Acceleration Programme (PAC) 2015-2018 was launched. Although, this year the same has been replaced by the “Advancement Programme”. This was announced in November 2017, the president of Brazil, Michel Temer. This new initiative starts with the objective of finalising a total of 7,439 works that had become paralysed and in which it is expected to invest up to 130,900 million Brazilian reais (40.928 billion euros), with a delivery period until the end of 2018. At this time, the project portfolio is composed of 104 initiatives in various fields. In all of them, the desire is to carry out the work with the support of the private sector either through invitations to bid, Public-Private Participation (PPP) or privatisations.

More than a third of the investments (5,600 million euros) will go to the transport area. In the railway field, three important projects include Ferrovia Norte-Sul, Ferrovia de Integração Oeste-Leste (FIOL) and Ferrogao with an investment of 1,114, 2,760 and 12,700 million Brazilian reais respectively (228, 688,000 and 3.179 billion euros). Some of the passenger projects designed for the 2014 Football World Cup and the 2016 Olympic Games that were not given the go ahead are now contemplated under this programme.

Major backing has also been given to the Bioceanic Railway Integration Corridor (CFBI) or Bioceanic Train. An Integration Freight Network (CFBI), which will cross the countries of Brazil, Bolivia and Peru.

In parallel with these initiatives, private freight tenders have devised investment plans to increase the efficiency of their networks. In this way, their purpose is to respond to the growing demand in the transport of iron, grain, iron and steel products and containers.

On medium and long-distance journeys, a feasibility study is under way for two medium-speed routes, travelling between 160 and 180 kilometres per hour.

The first line would be the connection of Sao Paulo-Americana, of 135 kilometres, while the second would connect Brasilia with Goliana through a route of 210 kilometres.

In the field of urban mobility, the programme “Cities Advancement” includes the construction of 898 kilometres of railways.

Likewise, the transport agencies of the different states and municipalities are clearly backing the investment in railway networks that improve the networks of the city and of each region. Hence, there are a large number of projects forming the subway, light rail, commuter and regional trains development portfolio. Most of the plans will be carried out in the metropolitan area of ​​São Paulo (expansion of the metro network, urban trains and construction of monorail branches). Other networks that are also included are those of the metro in Porto Alegre, Curitiba, Rio de Janeiro, Brasilia and Belo Horizonte. The light rail network is on the portfolio of eleven metropolitan areas.