Brazil’s North-South Rail Auctioned For R$2.7 Billion

By Lise Alves, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – Designed to be the backbone of Brazil’s rail transportation, the North-South Railroad was auctioned off this week, for R$2.719 billion. The winner, Rumo SA, obtained the concession use of a 1,537-kilometer transport network, from Estrela d’Oeste (SP) to Porto Nacional (TO).

“The result was excellent and exceeded the expectation of the government. said Infrastructure Minister Tarcisio Freitas.

“It’s a milestone, it’s a historic day, it’s a day of resumption of the railway sector in Brazil,” added the government official after the winner was announced.

The objective of the North-South Rail, whose construction began in 1987, was to integrate the national territory and contribute to the reduction of the logistical cost of freight transport in the country. The project, however, was never finalized due to lack of funds.

According to Rumo’s CEO, Julio Fontana, the railway will be used to transport agricultural commodities as well as fuel and bauxite.

The stretch between Açailândia in Maranhão state and Anápolis in Goiás state (about 1,550 kilometers long) is ready to be used, according to officials. The part between Ouro Verde, in Goiás, and Estrela d’Oeste, in São Paulo, however, (682 kilometers) still needs to be finalized.

This is the government’s first railroad auction in over ten years. The last railway concession took place in 2007, when VLI won the railroad concession that links Porto Nacional to Açailândia (MA).

According to the contract, Rumo will have the concession for thirty years, and is expected to invest R$2.8 billion in the network.