After auction win, Brazil's Comporte hungry for more rail concessions, PPPs

Brazilian passenger transport firm Comporte Participações will look at more concessions and PPP contracts in the rail sector after emerging as the winner of an important auction on Thursday.

Comporte led a consortium, including China’s CRRC, that won a PPP contract to build and operate the Trem Intercidades passenger rail line in São Paulo state.

"With this [consortium] model we will continue to actively look at concession contracts and PPPs in the rail passenger transportation area that will be offered in Brazil, whether subway, light rail or intercity train projects," José Efraim Neves, Comporte’s institutional director, told BNamericas.  

The 101km Trem Intercidades line will connect the metropolitan regions of São Paulo, Jundiaí and Campinas, using 15 trains. The contract also includes the construction of a 44km inter-metropolitan train line (TIM), which will have five stations: Jundiaí, Louveira, Vinhedo, Valinhos and Campinas.

"Our participation in the auction shows the confidence we have in the sector. Intercidades is a big project and we can't share many details yet because we just won the auction,” said Neves. “The process is still open because the authorities will now analyze all of our documents and only after this analysis, which will take a few months, will we actually assume the contract.”

The original investment projection for Intercidades was 13.5bn reais (US$2.7bn) and the state government has increased it to 14.2bn reais due to inflation.

Part of the financing will come from federal development bank BNDES, which has approved 6.4bn reais for the project. 

"The investment needed for this initiative is huge and from the moment we sign the contract and take over the project we will look for new financing solutions, whether through commercial banks, development banks and even bond issues in the capital market," said the executive.

Comporte has a 60% stake in the consortium that will assume Intercidades, with the remainder in the hands of China’s CRRC. Originally, Chinese firm CREC was also expected to form part of the consortium, according to a person familiar with the matter who recently spoke to BNamericas on condition of anonymity.

"I cannot speak on behalf of my Chinese partner in this contract, but in general it is common and possible that as the contract progresses other companies will enter as partners in the business," Neves said regarding the issue of a third partner.

Comporte, which is controlled by the Constantino family who founded local airline Gol, was created in 2002 with a strong focus on bus transportation and in recent years it expanded into the rail sector. 

The firm has a presence in 13 states with a fleet of 7,200 buses and is the operator of the light rail system in Santos. In 2022, it won the auction for the privatization of Minas Gerais state rail firm CBTU, assuming control of Metrô BH, which includes building line No. 2 in the city of Belo Horizonte.

Lack of bidders

The participation of a single consortium in the auction for the Intercidades contract caused surprise.

There were expectations that a bid would come from a consortium formed by Brazilian infrastructure firm CCR, European players Alstom and Mota-Engil, and a subsidiary of local infrastructure firm Queiroz Galvão.

This did not happen due to an internal disagreement at CCR, with the company's financial department considering the capex and opex as being too high, while the engineering department saw the process as feasible and attractive for the company, a source told BNamericas, asking not to be named.