Infrastructure News

08/12/2019

Major railway concession in Brazil granted

Agência Nacional de Transportes Terrestres (ANTT) in Brazil has signed the Norte-Sul railway concession contract with the consortium of Ruma Logistics on July 30, 2019. The BRL2.72 billion (US$692 million) concession includes railway works from Porto Nacional (TO) to Estrela d'Oeste (SP), spanning 1,537 kilometers as well as the acquisition of rolling stock.

The North-South Railroad was designed to become the backbone of Brazil's rail transportation, integrating the national territory and contributing to reducing the logistical cost of freight transport in the country. It will pass through the states of São Paulo, Minas Gerais, Goiás, and Tocantins. This rail stretch will enable cargo transportation from the Midwest and flow through both the Itaqui Port and the Santos Port.

The studies estimated the demand of 1.7 million tons of cargo by 2020, while by the end of the concession in 2049, the stretch could carry 22.73 million tons.

The North-South Railroad auction took place on March 28, in São Paulo. Rumo Logística won the tender with a bid of BRL 2.719 billion (USD 689 million) and a premium of 100.92%.

The stretch granted is located between Porto Nacional/TO and Estrela D'Oeste/SP (1,537 km) and is divided into two sections: central, between Porto Nacional/TO and Anápolis/GO, with a length of 855 km; and south, covering the Ouro Verde stretch of Goiás/GO and Estrela D'Oeste/SP, with a length of 682 km.

The central branch is fully completed and operational and available for commercial rail freight. The start of its operation is expected to occur until the end of 2019. The southern section, which connects the states of Goiás, Minas Gerais and São Paulo has 95% of the works completed. According to the contractual rules, the concessionaire has two years to complete the interventions and start operations in 2021.