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High-Speed Train Is Becoming a Reality, but the Ticket Price Is Alarming! With an investment of R$ 60 billion and promises to transform the infrastructure, the project already foresees when operations will begin.
Travel the 417 kilometers between Rio de Janeiro and São Paulo in just 1 hour and 45 minutes.
This is the estimated travel time on the high-speed train that could reach up to 320 km/h.
The project, which has been discussed for decades in Brazil, is back in the spotlight under the leadership of TAV Brasil, a company that received government authorization for the construction and operation of the railway system for 99 years.
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The estimate is that operations will begin in 2032, with a total investment projected at R$ 60 billion.
However, what has drawn the most attention is the ticket price: R$ 500 per segment, totaling R$ 1,000 round trip between the capitals.
Next, understand the details of this ambitious project and the impact it may have on the Brazilian economy and transport.
The Structure of the Project
The high-speed train will have four stations along the route.
In addition to the terminals in Rio de Janeiro and São Paulo, stops are planned in Volta Redonda (RJ) and São José dos Campos (SP).
The exact locations still depend on the approval of the city governments, but the idea is for the stations in the capitals to be built in central areas or to utilize existing structures to boost the revitalization of these locations.
With 38 million inhabitants in the two states and 30% of the national GDP concentrated in the region, the train could boost economic growth, facilitating the movement of workers, entrepreneurs, and tourists.
According to estimates from TAV Brasil, the project has the potential to add R$ 168 billion to GDP, create around 130,000 direct and indirect jobs, and collect R$ 46 billion in taxes by 2055.
Foreign Investors and Financial Challenges
To make the project viable, TAV Brasil is in negotiations with Chinese, Spanish companies, and Arab funds.
The goal is to raise the R$ 60 billion needed for line construction, train acquisition, and development of operating systems.
While the names of the involved companies have not been disclosed for confidentiality reasons, TAV Brasil’s CEO, Bernardo Figueiredo, stated in an interview with Exame that there are three possibilities: a single investment from one of the foreign groups or a joint financing model.
The Chinese, for instance, excel in railway technology, having built 40,000 kilometers of high-speed train tracks since the inauguration of the first line in their country in 2008.
The Spaniards have extensive experience in the sector, with significant projects in Europe and Latin America.
According to Figueiredo, regardless of the chosen investors, there is a consensus on the need for government support to ensure the project’s viability.
The company has already formally requested the Ministry of Transport to include the high-speed train in the Growth Acceleration Program (PAC).
This would allow for greater agility in environmental licensing, expropriation of lands, and financing.
A Model Based on Real Estate Exploitation
In addition to ticket sales, the project envisions an additional revenue source from real estate exploitation around the stations.
Current legislation allows for the expropriation of nearby areas for the construction of shopping centers, business hubs, and hotels, creating new commercial centers around the railway terminals.
This model has already been applied in other countries, such as South Korea.
In 2003, the station between Cheonan and Asan, 100 km from Seoul, was inaugurated with a real estate development plan.
Today, the region has transformed into a city with 600,000 inhabitants, driven by the economic growth generated by the high-speed train.
TAV Brasil’s expectation is that this type of exploitation will generate an additional revenue of R$ 27.3 billion, helping to financially enable the project.
A Long History of Frustrated Attempts
The dream of a high-speed train in Brazil is not recent.
In previous governments, especially during Dilma Rousseff’s administration, attempts were made to make the project feasible, but without success.
The first proposal involved a concession model where the government would finance the project through BNDES, but there was no interest from investors.
Next, the idea was for the State to construct the infrastructure and only hire a company to operate the train, but the project did not progress.
It was only in 2021, with the approval of the railway legal framework, that the possibility of a high-speed train fully funded by the private sector emerged, without the need for bidding.
As a result, TAV Brasil obtained official government authorization in 2023 to move forward with the project.
When Will the High-Speed Train Become a Reality?
The company’s schedule anticipates that technical, environmental, and economic studies will be completed by the end of 2026.
If everything goes as planned, construction of the lines and stations will begin in 2027.
The forecast is that the first trains will be operational by 2032, allowing Brazilians to finally have high-speed rail transport between the two largest cities in the country.
Given the high ticket cost, will the high-speed train be able to attract passengers and become a viable transport alternative?
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