Project that facilitates the construction of private railways is going to be sanctioned

The Chamber of Deputies concluded this Tuesday (14) the vote on the bill that allows the private sector to explore and build railroads through the granting of authorization.

Deputies rejected an attempt to change the text — the main one was approved symbolically on Monday (13). Now, the project is going to be sanctioned by President Jair Bolsonaro (PL).

Currently, companies can only explore the country’s railway network after participating in a concession auction carried out by the government.

This Tuesday, at a luncheon at the Parliamentary Entrepreneurship Front, minister Tarcísio Gomes de Freitas (Infrastructure) said that the government must send a provisional measure to combat what he called the law’s disparity, in order “not to lose what is being done.”

“Talking about railway authorizations is going back to a topic lost at the beginning of the 20th century,” he said. “We are having the opportunity, looking at the past and also realizing what other countries do, to take an important step towards rebalancing the transport matrix, so that we can have more efficient, more sustainable and cheaper transport .”​

With the new project rules, the Executive Branch will be able to open a public call process to identify the existence of those interested in obtaining authorization to build new railways or assume the administration of those that are idle or in the process of being returned or deactivated.

The authorization will be formalized through a fixed-term contract that must have a duration of 25 to 99 years.

This change is similar to what is foreseen in an MP (Provisional Measure) issued by the government at the end of August. However, lawmakers decided to prioritize a bill of authorship presented in 2018 by then-senator José Serra (PSDB-SP). Thus, the provisional measure should only be valid until it expires, in February.

The bill’s rapporteur in the Chamber, Deputy Zé Vitor (PL-MG), defended the changes and stated that they are necessary to stimulate the expansion of the national railway network. He also considers that the new model makes this type of transport an “interesting alternative for long-term investors”.

“It is estimated that the private sector would be willing to invest, initially, around R$ 100 billion in railways under private law, a figure that the public budget would hardly support”, he said.

Despite having been reported by the PT party Jean Paul Prates (RN) in the Senate, the party’s congressmen in the Chamber tried to postpone the vote on the bill with the argument that it was necessary to carry out more discussions on the subject.

“What is establishing itself are monopolies, and with insecurity, because we don’t even know if those companies that ask for authorization are really able to carry out their projects or simply want to have a reserve in mining, the so-called mining right to sit in above that authorization to negotiate for a higher value”, said deputy Carlos Zarattini (PT-SP).

During the authorization process, the railway regulator, in this case ANTT (National Land Transport Agency), must decide on the proposals received. If there is a single proposal, the authorization will be issued to that company.

When there is more than one interested party, the agency will need to promote a public selection process and observe the principles of legality, impersonality, morality, publicity and efficiency.

The selection process will consider as one of the judging criteria the largest offer of payment for the award.

The proposal also allows those interested in obtaining authorization for the exploration of new railways, new yards and other accessory installations, to apply for it directly to ANTT at any time.

In addition, the federal railway concessionaire with a contract in force on the date of publication of the law may require the adaptation of its concession contract to an authorization one.

The bill provides that railway operators can voluntarily join in the form of a legal entity governed by private law, not for profit, to promote self-regulation.

Through this instrument, operators will be able to establish voluntary norms of technical-operational standards, carry out the conciliation of conflicts between members, in addition to coordinating, planning and cooperating in the operational control of the railway networks operated by the members of the railway self-regulator.

The government has already granted nine authorizations for the construction and operation of railways within the Pró-Trilhos program, created through the provisional measure.

According to the Ministry of Transport, the authorized railways have the potential to add 3,500 kilometers of new tracks to the railway network, with R$50 billion in private investments.

Among the authorized companies is Ferroeste, which already acts as a concessionaire. The others are new to the sector: the cellulose company Bracell, the manager of the Alcântara Port Terminal, Grão Pará, the Macro Desenvolvimento consultancy, the port sector company Petrocity and the mining company Planalto Piauí Participações.

There are projects in São Paulo, Paraná, Santa Catarina, Mato Grosso do Sul, Maranhão, Espírito Santo, Minas Gerais, Distrito Federal, Pernambuco and Piauí.

Also according to the ministry, the government has already received 36 proposals for new railroads, which correspond to more than 11 thousand kilometers of new rails and add up to R$ 150 billion in planned investments.