Railway Concessions

11,000 km. Estimated investment: US$ 49.8 billion.
On August 15, 2012, the Brazilian Federal Government launched the Logistics Investment Program. The program includes a set of projects which will contribute to the development of a modern and efficient transport system and will be carried out through strategic partnerships with the private sector, taking into account synergies between road and rail networks, waterways, ports and airports.
In the railway sector, the program foresees investments worth US$ 49.8 billion in construction and/or upgrading of over 11,000 km of rail lines.
The railway program has three main guidelines: the provision of a wide, modern and integrated rail network; efficient and competitive supply chains; and lower tariffs.
The program comprises railway concessions due 35 years of broad gauge (1,600 mm) railways, with high load carrying capacity, and geometric design optimized to allow higher speeds (80 km/h).
The program introduces a new railway concession model, in which concessionaires will be in charge of the infrastructure, signaling and traffic control.
Concession Model Structure
1. The Concessionaire is the infrastructure manager.
2. The State-owned company Valec purchases the integrality of the operational capacity of the railway, and pays a tariff to the Concessionaire (Tariff for the Operational Capacity Availability – “Tarifa pela Disponibilidade da Capacidade Operacional - TDCO”).
3. Valec subleases, for consideration, parts of the right to use the railway infrastructure to Railway Operators, against the payment of an access charge (Tariff for Traffic Capacity – “Tarifa de Capacidade de Tráfego”).
4. The Concessionaire provides services directly to Railway Operators, against the payment of another Tariff (Entitlement Tariff - “Tarifa de Fruição”)
In this context, Valec will buy the full operational capacity and will make public offers of the acquired capacity, ensuring open access to the circulation of trains over the whole network. The capacity will be offered for users which may carry their own load, independent rail/logistics operators, and rail concessionaires.