Brazil railway projects keep growing under new regulatory model

The number of railway project requests and approvals in Brazil is continuing its upward trajectory thanks to a new regulatory model.

Private firms are increasingly taking advantage of a regulatory change that was authorized by President Jair Bolsonaro earlier this year, allowing companies to build and operate short-distance freight railways via government-issued rights-of-way. Previously, firms had to compete in tender processes that could take several years.

The government has so far authorized 13 companies from various sectors to build 22 stretches across the country. These lines add up to a total of 6,880km and are expected to involve investments of 103bn reais (US$19.4bn), the infrastructure ministry said in a press release.

The most recent authorization was granted to Porto do Açu Operações (controlled by Prumo Logística), which is the operator of the Açu port in São João da Barra municipality, in Rio de Janeiro state.

The company will invest 610mn reais to build a 41km railway to connect the port with an existing railway network in the region.

The Porto do Açu railway is part of an investment energy and infrastructure plan worth 6bn reais for the GNA II thermoelectric power plant (UTE), which will be the largest gas-fired thermal plant in the country. 

Under the new regulation, the government has received 79 requests involving 20,721km of railways and potential investments of 241bn reais.

Once approval has been granted by the government, companies are responsible for obtaining all the necessary licenses from different authorities to implement the project.