Tuesday, December 17, 2013

Brazil: Rio de Janiero-São Paulo Bullet Train License to be Auctioned Off in 2014-2015

According to The Latin American Tribune, Brazil plans to auction off a license to build and operate a high-speed rail link between Rio de Janeiro and São Paulo, the first project of its kind in Latin America, in late 2014 or early 2015, Transportation Minister César Borges said Thursday (December 12) in a teleconference with foreign reporters.

The government currently is reworking the bidding model to attract more interest in the project from private companies, he added, calling it “a necessity for the country’s development.”

In August, President Dilma Rousseff’s administration delayed the high-speed-rail auction after only one potential bidder – a consortium of French companies – expressed formal interest.

Borges also acknowledged that allegations that one of the companies that made up that consortium had fraudulently obtained a rail contract in the southeastern state of São Paulo also played a role in delaying the auction.

COMMENT: The studies will show that the three main cities along the route, which will link Rio de Janeiro to Campinas via São Paulo, are major cargo centers that also have pent-up demand for passenger rail service.

“That train will obviate the need to build new airports or roads to serve those cities in the future,” Borges said.

The project, which has an estimated price tag of $17.2 billion, will involve construction of a 511-kilometer (317-mile) stretch linking Rio de Janeiro and São Paulo and a 97-kilometer stretch connecting São Paulo and Campinas.