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The Brazilian Transportation Sector Will Now Have a New Company Following the Authorization of the Merger Between EPL and Valec Through a Presidential Decree, Whose Main Objective Is to Provide a Reduction in Operational Costs for Ongoing Projects
According to the Official Gazette released last Wednesday (05/25), there was a presidential decree at the beginning of the week that authorized the merger of the state-owned companies: Empresa de Planejamento e Logística (EPL) and Valec – Engineering, Construction and Railways, for the creation of Infra S/A. This will have main focus on the development of projects aimed at the Brazilian transportation sector and will be responsible for a significant reduction in operational costs.
EPL and Valec Will Be Able to Unite to Form a New Brazilian Company Focused on Developing New Projects Aimed at the Transportation Sector
Following the presidential decree authorizing the union, the companies EPL and Valec will be able to merge to form a new Brazilian company, Infra S/A. The official decree was published last Wednesday and the merger of the companies will form a company primarily focused on developing projects aimed at the transportation sector in the national territory over the next few years, according to EPL and Valec.
Furthermore, one of the main objectives of the merger of both companies to create the new transportation company is to reduce the operational costs of ongoing projects. This is because it is expected that BRL 90 million will be saved in operational costs per year with the union of EPL and Valec. And, with the publication of the presidential decree authorizing the merger, the expectation is that it will take up to 180 days for the company to be definitively established, after an agreement is reached between the companies for this to happen.
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Moreover, Infra S/A will be responsible for acting on strategic projects using technology focusing on modernizing infrastructure, in addition to supporting enterprises for environmental and territorial management of infrastructure projects, as well as providing consulting services on infrastructure for Brazil. Thus, the merger of EPL and Valec could contribute not only to reducing operational costs but also to making the Brazilian transportation and infrastructure sector even more efficient and modern.
Ongoing Projects of the Companies Will Continue with the Creation of Infra S/A and the Federal Government Expects a Significant Reduction in Operational Costs with the Decision
The creation of a new company aimed at the transportation sector in Brazil will be essential for the sector and the Minister of Infrastructure, Marcelo Sampaio, commented on the importance of the union of EPL and Valec for the current scenario of infrastructure and transport in the country. The Minister stated that “The company will increase productivity and enhance the efficiency in the structuring of infrastructure projects, always considering the logistics of transportation, structuring the future, without any discontinuity to what is underway.”
And the main highlight of this decision is the reduction of operational costs, since, in the initial phase of the merger, it should result in savings of BRL 30 million through a reduction in personnel and functional expenses, as well as by lowering the operational costs of both companies. In addition, the government estimates savings of BRL 90 million per year starting from the second year of the company’s operation.
Finally, all ongoing projects of EPL and Valec will be incorporated into the new company, such as the works on sections II and III of the West-East Integration Railway (Fiol) and the oversight of the works of the Center-West Integration Railway (Fico), in addition to other projects planned for the future.
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