Brazil's Mato Grosso launches call for US$2.3bn railway

Central Brazilian state Mato Grosso launched a public call for the construction of a freight rail line evaluated at 12bn reais (US$2.3bn).

The 700km railway will link state capital Cuiabá to grain-producing areas such as Rondonópolis, Nova Mutum and Lucas do Rio Verde, in addition to connecting to the national rail network.

"This modal is very important for the output of grains, but it also connects the industry and commerce of Mato Grosso with the national market. The food and ethanol industry will use this railroad," state governor Mauro Mendes said in a release.

According to state government sources consulted by BNamericas, logistics firm Rumo, part of the sugar and energy conglomerate Cosan, is considered the favorite to assume the project, which will be awarded via an authorization and not through a tender.

State legislators recently approved a bill allowing private sector players to assume rail projects under the model of authorizations, a mechanism that is also increasingly being used in other states.

Previously, any company interested in operating or investing in a railway was forced to undergo a long tender process that had to be organized by the federal government, which could take years.

Construction of the Mato Grosso line is expected to start within six months following the issue of the environmental installation license. The Cuiabá terminal is expected to be completed by the second half of 2025 and the Lucas do Rio Verde terminal by the second half of 2028.

MORE INVESTMENTS PROJECTED

Mato Grosso is attracting the interest of infrastructure players as the state is expected to see a wave of investments in transport projects in the coming years, as grain production is projected to double.

Earlier this month, Brazilian infrastructure consortium Via Brasil won the auction for the concession of the BR-163/230 highway, linking Mato Grosso and Pará states.

The consortium – comprising local infrastructure groups Conasa Infraestrutura and Zetta Infraestrutura e Participações, along with Rocha Cavalcante and M4 Investimentos – will pave and operate a 1,009km stretch of the highway.

The concession will generate an estimated 1.87bn reais in capex and opex of 1.2bn.

"We are very interested in the operation of Mato Grosso's highways, because grain production in the state will double in the coming years and the transport logistics there still need many improvements," Conasa CEO Mario Marcondes told BNamericas.

Federal government rail projects Ferrogrão and FICO are also designed to satisfy, in part, demand for grain transportation demand in the region.

"There is always a risk of an oversupply of logistics projects in a given region, but one thing is certain, the agricultural commodities area, which is the segment where Mato Grosso state is very strong, is a sector that has never disappointed in terms of performance in recent decades," João Pedro Boskovic Cortez, an infrastructure specialist at financial advisory firm Vallya, told BNamericas.