Brazil plans to update early renewal model for rail concessions

Brazil’s transport ministry formed a working group to update the early renewal model for rail concessions.

Currently, the government and concession holders may negotiate a contract extension years before expiration. This mechanism benefits companies, which keep their concessions without having to compete in an auction, and the government, as extensions generate advance investments.

"The working group … will have the mission of making suggestions to improve the early renewal instrument. The group will be composed of members of the [ministry’s] executive secretariat, the rail transport secretariat, the land transport agency (ANTT) and [state firm] Infra S. A.," the ministry said in a statement.

"After 45 days of work, extendable by another 45, the group members must present a detailed report with the results of the work carried out with representatives of the concessionaires, associations, specialists and other external agents of the sector who can also participate in the discussion," it added.

The early renewal model also applies to airport and highway concessions, but the updates under evaluation concern only rail lines.