Railway Concessions Could Generate R$ 25 Billion in Works

The Government Plans To Auction Two Railways For The Second Semester Of This Year, With Works That Can Generate R$ 25 Billion In Investments

The government plans to auction the following railways in the second semester of this year: the Ferrogrão and the Fiol. The former aims to improve the flow of agricultural production from the Midwest to the Northern Arc of Brazil; the latter will transport iron and grains produced in Bahia. Projections indicate that these projects will generate around R$ 25 billion in investments for the works, with the federal government collecting at least R$ 50.7 million from these auctions.

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West-East Railway:

With approximately 1527 km in length, the West-East Integration Railway-FIOL will link the future port of Ilhéus (on the Bahia coast) to Figueirópolis (in Tocantins), where it will connect with the North-South Railway. The railway works are nearly completed by Valetc.

The auction is scheduled to take place at the B3 São Paulo Stock Exchange on April 8. Interested companies must submit proposals by April 5. In addition to the right to manage the railways, the winner must also complete the remaining works.

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According to information from the Ministry of Infrastructure, the first section of the Fiol is very important for the flow of iron ore produced in the Caetité (BA) region and for the production of grains and ore in western Bahia. The transportation of ore and grains will be done via Porto Sul, a port complex to be built near the city of Ilhéus (BA).

Ferrogrão:

The government plans to grant the Ferrogrão, which is a “greenfield” project, meaning it is still on paper and needs to be built from scratch.

The railway’s route would extend from Sinop (MT) to Mirituba (PA), covering 933 kilometers. According to the Investment Partnership Program (PPI), which manages government concessions and privatization projects, the completed Ferrogrão will become a new export route for soybeans, corn, and soybean meal produced in central and western Brazil.

According to government estimates, the winning company of the auction will have to invest R$ 21.5 billion in the construction of the railway. The maintenance cost during the contract period is estimated at R$ 63.7 billion.