President Jair Bolsonaro (PL) sanctioned this Thursday (23), with vetoes, the law that allows the private sector to explore and build railroads by means of authorization granting, called the New Legal Framework for Rail Transport.
Under the previous rules, companies could only explore the country’s railway network after participating in a concession auction carried out by the federal government.
The current concessionaires, if harmed by the change or if they commit to expanding the service, may migrate to the new model, provided that the current contractual obligations regarding investments and maintenance of passenger transport are respected.
Among the sections suppressed by Bolsonaro is the provision that established preference for current concessionaires in obtaining authorizations in their area of ​​influence.
According to Palácio do Planalto, the differentiated treatment for current operators would make it difficult for new providers to enter, which would inhibit competition between companies.
Documentary requirements of operators in the granting process were also vetoed. Planalto Palace considered them not essential for obtaining permits.
Bolsonaro also changed the validity clause to ensure that the new law enters into force within 45 days after its publication, avoiding a hiatus between the end of the term of the MP (provisional measure) that currently deals with the matter and the beginning of the validity of the new law.
“The law brings several innovations that seek to facilitate private investments in the construction of new railways, in the use of idle stretches and in the provision of rail transport services”, stated a note from the General Secretariat of the Presidency.
The new model, which allows the construction of new railroads by authorization, is similar to what happens in sectors such as telecommunications, electricity and ports.
The Executive may 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, which will have a duration of 25 to 99 years.
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 contract.
The bill provides that railway operators can voluntarily join in the form of a non-profit, private legal entity 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 change implemented by the law sanctioned by Bolsonaro on Thursday is similar to what was foreseen in an MP edited by the government in August.
The National Congress decided to prioritize a bill presented in 2018 by then-senator José Serra (PSDB-SP).
During the term of the MP, the government has already granted nine authorizations for the construction and operation of railways within the Pró-Trilhos program.
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.
There are projects in São Paulo, Paraná, Santa Catarina, Mato Grosso do Sul, Maranhão, EspÃrito Santo, Minas Gerais, Distrito Federal, Pernambuco and PiauÃ.
According to the ministry, the government has already received more than 30 proposals for new railroads, which correspond to more than 11,000 kilometers of new tracks, an estimated investment of 150 billion.
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