FCA confident about regulatory goals

Brazilian rail concessionaire FCA will meet production and accident-reduction goals established by national land transport regulator ANTT, according to Guilherme Laager, logistics division executive director of mining giant CVRD (NYSE: RIO). CVRD operates FCA (Ferrovia Centro-Atlantica), whose 7,080km of lines cover the states of Sergipe, Bahia, Goias, Espirito Santo, Rio de Janeiro, Minas Gerais and the federal district. Earlier this week the ANTT released 2003-2007 goals for FCA, which will be expected to reach 12.8 billion TKUs by 2007, a 49% jump from 2002, while accidents will also have to be reduced by 49%. Targets for other concessionaires will be released in the coming weeks. Laager, who also presides over the country's rail concessionaires association ANTF, told BNamericas the goals were discussed with the concessionaires and they are achievable. The regulator also published a resolution to fine concessionaires that fall short of their targets. When contracts were originally signed, fines could not be imposed, and according to the government this acted as a disincentive for carrying out investments to meet required objectives. Meanwhile Laager welcomed news that national development bank BNDES will allocate US$3bn-4bn over the next four years to the rail sector. The investment falls in line with the government's rail plan launched earlier this year to revive the sector. Rio de Janeiro-based CVRD is the world's largest iron ore producer.