The mega railway that will change Brazil! Lula announces BILLIONAIRE investment to resume Transnordestina works and leaves Northeasterners celebrating!

Government announces R$3,6 billion to resume work on the Transnordestina Railway with the new Social Infrastructure Investment Fund.

Last Friday, (02/0), a new stage for the Transnordestina railroad was initiated with the sanction of the Social Infrastructure Investment Fund (FIIS) by President Luiz Inácio Lula da Silva. The ceremony took place at the Port of Pecém, in São Gonçalo do Amarante, Ceará, and marks the return of railway expansion works, which will receive a significant investment of R$3,6 billion from the government.

Creation of the FIIS and resources for the Transnordestina Railway

The FIIS, the result of a collaboration between the Government and the National Congress, aims to finance several infrastructure projects, including the completion of the railroad Transnordestina.

The new law provides for the allocation of R$3,6 billion for this project, with the aim of resuming and accelerating the works.

The fund is an initiative to guarantee necessary resources and will be managed by the Civil House, with the National Bank for Economic and Social Development (BNDES) as the financial agent.

According to the Minister of Transport, Renan Filho, the works should begin immediately.

The initial section that will be resumed is between Quixeramobim and Quixadá, 50 kilometers long and with an estimated cost of R$750 million. Of these, R$600 million will come from BNDES.

The works will also include the construction of a walkway at the Port of Pecém to connect cargo ships to the railway tracks.

History and challenges of the Transnordestina Railway

The Transnordestina railway has a long story, marked by several challenges and interruptions.

The project began to be discussed in the 20th century, when economist Celso Furtado highlighted the need for a railroad that would connect the Northeast region to the rest of Brazil.

Since then, sections have been built and abandoned, and the project has suffered several interruptions.

President Lula mentioned that the project entered his personal radar in 1989, during his first presidential campaign, after a conversation with the former governor of Pernambuco, Miguel Arraes.

Lula recalls that, during his first term, he tried to start the works, but faced difficulties due to different interests and political interpretations.

After a series of meetings and legal milestones, the project gained some momentum, but suffered further delays.

Fund structure and administration

The FIIS was created to ensure that resources are allocated efficiently and transparently.

The law establishes that the fund will be fed by budget allocations, loans and agreements.

The administration of the fund will be the responsibility of a management committee coordinated by the Civil House.

The expectation is that the FIIS will raise around R$10 billion, with R$3,6 billion allocated exclusively to Transnordestina.

In addition to financing the railway, the fund will also allow the renegotiation of loans with Banco do Nordeste (BNB) and allow new disbursements.

Between 2024 and 2026, the fund should release R$1 billion per year for the project, with a further R$600 million in 2027.

These resources will allow the completion of more than a thousand kilometers of tracks, essential to connect Ceará, Piauí and Pernambuco.

Impact and future perspectives

Transnordestina is considered one of the largest infrastructure projects in Northeast Brazil.

The completion of the railway is seen as a priority for the Government, which intends to integrate it into the Low Carbon Hydrogen Legal Framework project, sanctioned at the same ceremony.

This project aims to adapt the Port of Pecém for the production of green hydrogen, connecting it to Transnordestina and potentially transforming the region.

Minister Renan Filho highlighted that the completion of Transnordestina will contribute significantly to the economic development of the region, improving the transport of grains, fertilizers, cement, fuels and ore.

Delivery of Phase 1 is scheduled for 2027, with Phase 2 completed by 2029. The project is crucial for the Brazilian trade balance and the development of the northeastern states.

The Transnordestina project has a total length of 1.209 kilometers, connecting Eliseu Martins, in Piauí, to Oporto from Pecém, in Ceará, passing through Salgueiro, in Pernambuco.

A 548-kilometer branch that leaves Salgueiro towards Pernambuco will also be built. 

This branch was initially excluded from the concession contract, but was reinstated in the New PAC, with a forecast of R$450 million for its construction.

The Ministry of Transport published a notice to hire the company responsible for the executive project of the Pernambuco branch in April this year.

This stretch is crucial for the flow of products from the region and will have a significant impact on the local economy.