Lack of Bids Makes Brazil Change Rules for São Paulo-Rio Bullet Train

Rio-São Paulo bullet trainThe Brazilian government decided to change the rules for the construction and operation of the high-speed train that will connect Rio de Janeiro, São Paulo and Campinas. Future biddings will be divided into two stages: the first will define the technology and operator, the second the consortium responsible for the construction.

As a result the competitive bidding scheduled for July 29 has been canceled. No proposal had been presented until now for the construction and operation of the bullet train.

According to the director general of the National Agency of Land Transportation (Agência Nacional de Transportes Terrestres – ANTT), Bernardo Figueiredo, foreign companies that have the necessary know-how were unable to form partnerships with contractors so the bidding was unsuccessful.

“There were six groups with the technical knowledge but they had problems joining civil construction firms. Now we will separate the operation from the construction,” explained the director general.

By dividing the bidding process the government expects there will be more competition, especially for the first stage, declared Figueiredo.

The director general denied that the new bidding process “disfigured” the original project. “We are not making changes to please the interests of anyone,” he said. “The operator will provide details in an executive project, but the government will establish limits for changes.”

Although no dates have been set, the first round of bidding should take place this year, probably between September and October. Figueiredo added that the change in the bidding process is not expected to mean any significant change in the project chronogram.

Work is still forecast to begin in 2013. As for costs, they are not expected to change either. The projected cost of the high-speed train project is 33 billion reais (US$ 20.9 billion).

There will be 20 billion reais in loans from the Brazilian Development Bank (“BNDES”) plus $3.4 billion in direct investment by the government. “There will not be any changes in the technical or economical side of the project,” said Figueiredo.

The high-speed train (“trem de alta velocidade – TAV”) will run for 510 kilometers. Only part of it is expected to be ready for the 2016 Olympic Games.

Transportation

Palácio do Planalto, Brazil’s White House, announced that the acting minister of Transportation, formerly the deputy minister (secretário executivo), Paulo Sergio Passos, will be the new minister.

Passos is from Bahia. He studied economics at the Federal University of Bahia. Entered public service in 1973 at the ministry of Transportation.

He also worked at the ministries of Social Well-Being and Planning, Budget and Management. During the Fernando Henrique Cardoso administration he was a deputy secretary at the Federal Budget Secretariat for six years.

He is married to the singer/composer Rosa Passos. They have three children.

ABr

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