Brazil's Comporte wins auction to privatize Minas Gerais rail firm

Brazilian urban and interurban bus operator Comporte Participações won the auction for the privatization of Minas Gerais state rail firm CBTU.

The company, controlled by the Constantino family – founders of local airline Gol – was the sole bidder and offered a payment of 25mn reais (US$4.8mn) versus the minimum price set by the state government of 19.3mn reais.

The privatization was structured with the support of development bank BNDES.

"Today's auction marks the end of the BNDES current administration that began in 2019. This administration was committed to modernizing Brazil and in all we helped organize around 40 auctions, surpassing a total of 270bn reais in investments to be made in a wide variety of areas," said Fábio Abrahão, BNDES concessions and privatizations director, after the auction. 

The privatization of the company paves the way for the expansion of the Belo Horizonte subway under a concession contract awarded to the buyer. The contract auctioned on Thursday comprises two stages, with the first being the privatization of CBTU and the second the concession contract for the operation, maintenance and expansion of the subway network in the Minas Gerais state capital.

The total estimated investment in the project is put at 4bn reais over the 30-year concession agreement. Of the total, 2.8bn reais will come from the national government, 428mn reais from Minas Gerais state and the rest from the contract winner.

WORKS 

The new owner of CBTU will be responsible for extending metro line No. 1 and building line No. 2.

Currently, the subway network has only one line, which serves the municipalities of Belo Horizonte and Contagem, running 28.1km with 19 stations.

The construction of line No. 2, to be outlined in the concession contract, will involve the addition of 10.5km and seven stations.

The subway operator will also be obliged to renew the train fleet and modernize the systems and infrastructure of the network.