Brazil-China consortium wins US$2.7bn auction for São Paulo rail project

A consortium made up of Brazilian firm Comporte and China’s CRRC won an auction on Thursday for the Trem Intercidades passenger rail link in São Paulo state in a contest that saw no other bidders.

The PPP contract to build and operate the 101km line involves investments of around 13.5bn reais (US$2.7bn).

Comporte, which is controlled by the Constantino family who founded local airline Gol, won the December 2022 auction to privatize Minas Gerais state rail firm CBTU.

Another consortium formed by Brazilian infrastructure firm CCR, European players Alstom and Mota-Engil, and a subsidiary of local infrastructure firm Queiroz Galvão, evaluated the PPP contract but did not present a bid.

“The success of this auction can stimulate other passenger train projects to connect different cities," Joubert Flores, president of Brazilian passenger transport association ANPTrilhos, told BNamericas. “Some are being evaluated in São Paulo state, which intends to connect cities such as Sorocaba, Santos and São José dos Campos. There are also projects in other states that can move forward, such as the passenger train to connect Brasília to Luziânia and also between Feira de Santana and Salvador in Bahia."

Flores also highlighted some challenges of bringing such projects forward. “The advancement of these projects depends heavily on capital from the private sector because the public sector cannot assume these contracts alone. But to attract capital from the private sector, you need really serious companies with technical experience, very well-structured contracts and properly defined guarantees," he said.

"It's better to have projects than not to have them. As they are long-term projects, it's not that complicated for the local industry to position itself to meet such demand," Vicente Abate, president of rail equipment manufacturers’ association Abifer, told BNamericas.  

THE CONTRACT DETAILS

The 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.

Construction of Trem Intercidades is expected to be completed in 2031, while TIM is likely to be finished in 2029.

It also comes with a concession for line No. 7-ruby of São Paulo metropolitan rail company CPTM. It runs 57km between Barra Funda and Jundiaí and has 17 stations. The 30 trains that serve this route will be transferred to the new concessionaire.

Federal development bank BNDES has approved 6.4bn reais in financing for the project.