Brazil business leaders demand more public investments in subways

Influential Brazilian business associations like the Transports National Confederation (CNT) and the National Association of Railroad Passenger Carriers (ANPtrilhos) are demanding more government investments in subways, despite ongoing fiscal challenges.

"Brazil is in a critical fiscal situation, and this will be a huge challenge for the presidential candidates. But the role of the federal government is irreplaceable, since it is the promoter of the country's development strategy. Therefore, it must act in support of the projects of local governments," said Bruno Batista (pictured), CNT executive director.

Elections for president, state governors and legislators are scheduled for October and elected representatives will take office in January 2019.

Currently, the country needs investments of 235bn reais (US$61bn) in urban mobility in the 15 largest metropolitan regions and requires 1,633km of high and medium capacity transportation, according to a study by development bank BNDES.

São Paulo, Brazil's largest city and Mexico City both began developing their respective subway networks in the 1970s. Currently, São Paulo's network totals 80km, compared with Mexico City's 200km.

"The implementation of trains, subways and VLTs (light rail vehicles) reduces costs (arising from) congestion and hospitalizations. It results in more time for people for leisure, study and family. The time spent with mobility could increase the country's GDP," said ANPTrilhos president Joubert Flores.

CHALLENGES TO ATTRACT PRIVATE INVESTMENTS

Despite huge needs for investments, the railway sector has problems to attract private sector investments.

"In general terms assets linked with infrastructure logistics are more exposed to regulatory risks and the railway sector has even more exposure, compared with highways and airports," Daniel Engel, a lawyer specialized in regulations and infrastructure at Cascione, Pulino, Boulos & Santos law firm, told BNAmericas.