Private Investment for Railway Construction Exceeds Expectations and Reaches R$ 80 Billion

The New Railway Legal Framework Can Unlock New Projects and Investments. The Measure Reduces Bureaucracy for the Construction of New Railways

The new railway legal framework is set to be voted on this Tuesday (5) in the Senate Plenary. The project addresses new grant instruments for railways under private operation, both at the federal and state and municipal levels. The Minister of Infrastructure, Tarcísio de Freitas, projected that the immediate capital application would be around R$ 30 billion; however, so far, there are already at least R$ 80 billion allocated to 14 authorized railway construction projects, which can be considered a milestone in the sector. Read this news as well: Section of the Centro-Atlântica Railway in Bahia Will Receive R$ 3.5 Billion in Investments

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The Railway Legal Framework

In public railways, in addition to the current grant model through concession, a simpler grant method will be permitted, through permission. Another novelty of the provisional measure is the simplification of the procedure for providing railway transport services as an Independent Railway Operator. Now, it is sufficient to present the required documentation to the National Land Transport Agency (ANTT), and the authorization will be issued automatically.

The measure also allows current concessionaires, if harmed by the operation of an authorized railway or if they commit to expanding the service, to migrate to the new legal authorization regime. This migration will not prejudice obligations contained in current contracts regarding investments and the maintenance of passenger transport.

Investments Have Already Surpassed Government Targets

The Minister of Infrastructure, Tarcísio Freitas, stated that the Federal Government recently announced it received double the number of requests than expected for the construction and operation of railways by the private sector. Tarcísio mentioned that seven requests were expected but 14 were received; the initial project aimed to raise R$ 30 billion in investments. So far, R$ 80 billion has been raised.

The government received the 14th request for the construction of a railway without the need for an auction, the so-called railway authorization. This is the “Estrada de Ferro JK,” which will be 1,108 km long and will connect Brasília and Barra de São Francisco (ES). The interested company is Petrocty, and the expected investment is R$ 13.5 billion. In addition to this investment, the company also committed to injecting R$ 700 million into six UTACs (Cargo Transfer and Storage Units) along the tracks.

Also Check This News: Federal Government Launches Program to Boost Railway Construction

The Ministry of Infrastructure informed in a statement that following the Provisional Measure that enables the Pro Trilhos program of the Federal Government, it has already received 11 requests for authorization to construct railways across the country. Together, these requests total 3,300 kilometers of new tracks and R$ 53.5 billion in investments.

The Pro Trilhos was instituted by Provisional Measure No. 1,065/21 aiming to increase the attractiveness of the private sector to invest in railways, whether through new projects or using existing railways.

During the ceremony, requests for railway authorization were signed for the construction of 11 stretches of railways. Together, these requests total 3,300 kilometers of new tracks and R$ 53.5 billion in investments. The new railways cross cities in nine states across four Brazilian regions: Espírito Santo, Maranhão, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Paraná, Pernambuco, Piauí, and São Paulo.