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Brazil, the country of trains? The government's railway plan foresees up to R$100 BILLION in investments for railways

Written by Alisson Ficher
Published 16/01/2025 às 17:16

With an investment of R$100 billion, Brazil could be on the verge of a revolution in rail transport. New projects connecting the North, Northeast and Southeast promise to transform the country's logistics landscape, while abandoned tracks will be revitalized.

For decades, rail transport in Brazil was relegated to the background, while highways and ports accounted for most of the infrastructure investments.

However, a new era may be dawning.

O federal government is working on the final details of the ambitious National Railway Plan, a project that promises to change the country's logistics landscape with contributions that could exceed $ 100 billion.

This plan not only aims to connect strategic regions, but also promises to revitalize a rail system that has long been in need of attention.

The plan in detail

According to information released by the Folha de S. Paul, the railway concessions package will be officially announced in February by the Ministry of Transport.

It foresees the supply of about 4.700 kilometers of railways for the private sector, covering projects that cross the Southeast, North and Northeast of Brazil.

The government estimates that approximately 20% of the total costs of each project will rely on public resources to ensure its economic viability.

Renan Filho, Minister of Transport, confirmed to Sheet that the recent renegotiation of contracts with companies such as Vale, Rumo and MRS Logística has already guaranteed an initial contribution of $ 21,2 billion.

These resources are intended for the construction of new sections and the modernization of existing routes. Among these agreements, the one signed with Vale stands out, which injected $ 17 billion In the project.

“With the approval of the renegotiations by the TCU (Federal Court of Auditors), we were able to secure resources to make these concessions viable.

Historically, the government has had to contribute around 20% of the budget for railway projects for them to be economically viable.

Now, we can move forward with this,” said the minister.

Main projects of the railway package

The National Railway Plan includes five major projects that promise to transform rail transport in Brazil. Among them are:

North-South: the stretch between Açailândia (MA) and the port of Vila do Conde, in Barcarena (PA), will be granted to the private sector. This segment, of 477 km, is strategic for connecting the North to the national railway network.

transnordestina: the plan is to connect Eliseu Martins (PI) to Estreito (MA), in a stretch of 600 km which will connect to the North-South.

I stay-Fiol: the concession brings together the Central-West (Fico) and West-East Integration (Fiol) railways, forming a route of 2.400 km. This system connects Lucas do Rio Verde (MT) to Ilhéus (BA), crossing key regions for agribusiness.

Southeast Railway Ring: with 300 km, this route will connect Vitória (ES) to Itaboraí (RJ), connecting the Vitória-Minas Railway to the MRS Logística network.

Ferrograin: with 933 km, will connect Sinop (MT) to Miritituba (PA), facilitating the flow of agribusiness to ports in the North. Despite its importance, this project faces challenges related to environmental licensing due to its location in the Amazon region.

Problems and challenges

While some sections have already had some of the work completed, others face significant obstacles.

Ferrogrão, for example, is under legal proceedings and awaits approval from the Federal Supreme Court (STF) due to environmental concerns.

Furthermore, the concession of the Fico-Fiol route depends on negotiations with Bahia Mineração, which is facing financial difficulties and is in the process of returning part of the stretch to the Union.

The concession model proposed by the government also introduces a new feature: the company that shows the least dependence on public resources will win, stimulating competitiveness and efficiency.

Recovery of abandoned sections

Another important aspect of the plan is the recovery of 11,1 kilometers of abandoned tracks, which represent around 36% of the national railway network.

Some of these sections have been turned into scrap over the years. Now, the government is seeking to return them to operation through compensation to the current concessionaires and new tenders.

According to the Ministry of Transport, the revitalization of abandoned railway sections can bring logistical and environmental gains, reducing dependence on road transport, which is more expensive and generates more carbon emissions.

A leap in national transport

The railway plan is an important step towards diversifying transport modes in Brazil.

In 2023 and 2024, the highway and port sectors advanced significantly, with nine road concessions e 18 port terminal auctions, totaling investments of R$71 billion.

However, the railway sector remained stagnant, with progress restricted to contract renegotiations.

With the implementation of the National Railway Plan, the government hopes to attract private investment, reduce logistics costs and boost Brazil's competitiveness in international trade.

Promising future or challenges ahead?

Despite the government's optimism, many challenges still need to be overcome, especially with regard to environmental and financial issues.

Will Brazil finally take the leap needed to transform its railways into a logistics powerhouse?

Do you believe that the National Railway Plan will be enough to revolutionize transportation in Brazil or are the challenges still greater than the investments? Leave your opinion in the comments!

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Geraldo Arruda
Geraldo Arruda
18/01/2025 19:59

It's our fast passenger train
How will it be?……

Alisson Ficher

Journalist graduated in 2017 and working in the field since 2015, with six years of experience in print magazines, stints on broadcast TV channels and over 12 online publications. Specialist in politics, jobs, economics, courses, among other topics. Professional registration: 0087134/SP. If you have any questions, want to report an error or suggest a topic on the topics covered on the site, please contact us by email: alisson.hficher@outlook.com. We do not accept resumes!

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