Brazil’s federal government renewed early the concession of logistics firm MRS Logística for the 1,600km Malha Sudeste rail network, which will trigger investments of 31bn reais (US$6bn).
Originally due to expire in 2026, the concession will now remain valid through 2056.
“Although the announcement is positive for the sector, the impacts of this early renewal, as well as other similar contracts signed recently, will only start to have a positive impact on the number of new wagons and locomotive orders at the end of 2023. Until then, the industry will continue with very high levels of idleness,” Vicente Abate, president of rail equipment manufacturers association Abifer, told BNamericas.
Of the total investment, 11bn reais will be capex and the rest opex.
“[Of the capex,] 6.2bn reais will be for capacity expansion and performance improvement, including the construction and expansion of yards, remodeling of the permanent way and support facilities, in addition to the acquisition of locomotives, wagons and equipment to support the growth in demand and the performance parameters determined by the government,” MRS said in a statement.
The rest of the capex, 4.8bn reais, will be used by the government to unlock the 10.2bn-real Trem Intercidades intercity rail project between São Paulo and Campinas. São Paulo state is planning to publish the tender notice for the auction to build and operate the line soon.
The early renewal will also spark several other investments:
– construction of four intermodal hubs in São Paulo city, Igarapé in Minas Gerais and Queimados in Rio de Janeiro state;
– doubling rail access capacity for all operators to Santos port;
– expansion of rail access to Rio de Janeiro port;
– investments in viaducts, pedestrian bridges, safety walls, and works to reduce rail interference in communities;
– acquisition of locomotives and wagons to meet increased demand;
– purchase of rail maintenance equipment;
– expansion of rail yards in the three states where MRS operates.