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ABIFER NA MÍDIA – INTERNACIONAL – Brazil lining up USS7bn auction for Ferroeste project in H2

27.06.2022 | | Notícias do Mercado

Fonte: BN Americas
Data: 22/06/2022

Brazil’s Paranâ and Mato Grosso do Sul states are planning to hold an auction for the concession of the Nova Ferroeste rail project in the second half of 2022, with the contracts expected to lead to total investments of 35.8bn reais (US$6.94bn).

The state governments have published the preliminary notice for the project and have also launched a public consultation, open until July 15, to receive proposals or comments from stakeholders.

“The Nova Ferroeste project is extremely important. It’s strategic for the south and center-west region of the country. It will certainly generate acquisitions for the Brazilian rail industry, from the construction to the operational areas,” Vicente Abate, president of rail equipment manufacturers association Abifer, told BNamericas.

Once the final version of the notice is published, the preliminary environmental license is expected to be obtained in the second half of the year, allowing the auction for the concession to go ahead.

The preliminary notice for the project can be seen eh,re in Portuguese.

“This is the last chapter of a novel that has lasted more than 20 years. When I took over the government in 2019, I asked whether there was a project, an environmental and feasibility study. There was nothing. In other words, Ferroeste was only used for politics in recent years. We’re expectant about this project, a transformative project, which will serve Brazil as a whole. Now the world will have the opportunity to invest in this great export corridor,” Paranä state governor Carlos Roberto Massa Jdnior said in a statement.

The technical, economic and environmental feasibility study (EVTEA) foresees the investment of 35.8bn reais for the construction works and purchase of rolling stock for the 1,567km of lines that will connect Paranâ, Mato Grosso do Sul and Santa Catarina states.

Amid efforts to attract the interest of investors and mitigate risks, the project will comprise five different sections and each contract will be offered in separate auctions, according to the current plans. The minimum fee for each section to be auctioned is expected to be set at 110mn reais.

“The format [of the auction] should attract Brazilian and international investors,” said Abate.

The five sections of the railroad will connect the cities of Guarapuava and Dourados, Dourados and Maracaju, Cascavel and Foz do Iguaçu, Cascavel and Chapeco, and Guarapuava and Paranaguá.

The most challenging section is considered Cascavel to Chapeco, which will allow trains to reach Paranaguâ port. This section alone is expected to require investments of 14.5bn reais.

“This is the most difficult line to build, both from an environmental and engineering point of view, as it cuts across two mountain ranges. It is more environmentally sensitive and has complex topography. It is also the gateway to Paranaguâ port, so there is the expectation of intense cargo movement,” said the coordinator of the Paranâ state rail plan, Luiz Henrique Fagundes, in a release.

The Nova Ferroeste projects will reduce logistics costs for exporters and increase the amount of cargo transported via rail Paranâ, Mato Grosso do Sul and Santa Catalina states, all of which produce important agricultural exports, and will help connect the Brazilian rail network to those in Paraguay and Argentina.