FIOL project

BRAZIL: The government of recently-elected President Luiz Inácio Lula da Silva has vowed to continue the previous administration’s policy of investing in rail projects and has proposed to establish a national rail secretariat.

In a meeting last month with President of the National Transport Confederation Vander Costa to discuss rail and road projects, Transport Minister José Renan Vasconcelos Calheiros Filho affirmed that ‘we are going to resume works that have halted and launch the boldest railway programme in recent years’. He also promised improvements to major roads to cope better with the rainy season and said he hoped to ‘work together with the NTC and other entities in the sector in the modernisation of transport logistics’.

In a speech to mark his inauguration, Renan Filho set out priorities for his tenure and flagged up the 20% market share of rail freight in Brazil as too low. Warning that this had ‘stressed’ the road network, he said he wanted rail to achieve a 40% share by 2035.

Despite a statement that he intended to ‘revisit’ the legal framework governing rail policy, Renan Filho does not envisage radical changes from the previous government’s strategy. He expects to continue supporting the policy of concessions that will allow the private sector to invest in rail projects, particularly those of a ‘structural’ nature.

In his evaluation of the transport portfolio, Renan Filho aims to make it attractive to the private sector with the possibility of setting up public-private partnerships for some projects. He has undertaken not to interfere with programmes that are already in place.

Renan Filho referred to the programme of early concession renewals and said that this would continue as it ‘means a robust benefit for society’. Another proposal supported by the minister is for ‘green bonds’ to be issued for rail investment projects.

The minister is understood to be particularly keen to increase the share of agricultural produce being shipped by rail out of Mato Grosso state, from western Bahia and the Matopiba area which includes parts of Maranhão, Tocantins, Piauí and Bahia states. Among his priorities are concession auctions for the next two phases of the FIOL project as well as the Midwest Integration project known as FICO.

Renan Filho also wants to restart the stalled concession for the 933 km Ferrogrão scheme connecting Sinop in northern Mato Grosso to the inland port of Miritituba on the River Tapajós in Pará state, announcing that he would be discussing this with the Ministry of the Environment. He believed the railway offered environmental benefits compared with continuing to move products by road through a sensitive conservation area in the Jamanxim national park.

Railway suppliers organisation Abifer has broadly welcomed the government’s rail policy so far.