Infrastructure News

04/02/2019

Brazilian consortium awarded BRL2.72 billion Norte-Sul railway concession

The consortium of Rumo SA has been awarded with development contract after the auction of the EF-151, known as the North-South Railroad (FNS), held on Thursday (March 28), on the São Paulo Stock Exchange, B3, with an offer of BRL2.72 billion (US$692 million). The concession granted goes from Porto Nacional (TO) to Estrela d'Oeste (SP), spanning 1,537 kilometers.  

With the result, the winning consortium will have to invest BRL2.8 billion (US$713 million) in the railroad. The contract establishes two types of obligatory investments: with fixed terms and conditional on demand. In addition, the concessionaire will have to invest in the execution of environmental plans; implementation of maintenance workshops and filling stations; acquisition of railway equipment and rolling stock, which will be evaluated by the National Land Transport Agency (ANTT) through indicators and technical parameters.

The investments with certain deadlines include: implementation of lower passages, relocation of transmission lines, implementation of kilometer marks, implementation of a system of protection of bridge pillars, completion of Pátio de Estrela d'Oeste, installation of derailment detectors, licensing and signaling of the road, installation of storage terminal for loading and unloading of solid agricultural bulk and completion of the remaining works of the South Extension (remainder of lots 1S, 1SA, 3S, 3SA; and 4S and remainder of superstructure of lots 5S and 5SA ).

The demand-driven investments refer to interventions to be carried out by the concessionaire to ensure the railway's adequate operational capacity against the rail freight demand, in order to keep the Railway Saturation Index (ISF) always below 90%.

The North-South Railroad was designed to become the backbone of Brazil's rail transportation, integrating the national territory and contributing to reduce the logistical cost of freight transport in the country.

The section known as the North-South Central Section runs from Palmas (TO) to Anápolis (GO) and is 855 km long. Currently, it is in operation, with cargo handling by VALEC Engenharia, Construções e Ferrovias SA The Southern section of the railroad comprises the municipalities of Ouro Verde de Goiás (GO) and Estrela d'Oeste and is 682 km long. In this section, the works are in the final phase.

The northern section, between Açailândia (MA) and Porto Nacional (TO), is 720 km long and has been in commercial operation for the sub-concessionary Ferrovia Norte Sul SA since 2007. This section is not included in the concession.