Brazil to Auction $44.5 Billion in New Railways in April, June

The Brazilian government plans to auction 10,000 kilometers of new railways in April and June in an investment estimated at 91 billion reais ($44.5 billion), according to the top official at Brazil’s state planning company.

Vale SA, MRS Logistica and ALL America Latina Logistica are among companies that showed interest in operating the railways, Planning and Logistics Co. head Bernardo Figueiredo said in an interview in Brasilia. Auction rules will be published in March and May, he said.

The Brazilian government last year announced plans to sell licenses to non-state companies to build and operate railways, roads, ports and airports with the goal of boosting economic growth. In August, President Dilma Rousseff said railroad concessions would amount to 91 billion reais in investment.

New regulations prohibit companies that build railways from operating them, a practice that was previously allowed, Figueiredo said. The railways will be used to transport grain, minerals, fertilizer, fuel and steel, as well a passenger trains, he said.

“The government wants to end monopolies in railways, end privileges and open rail to competition,” he said.

The first round of auctions in April will be for 2,600 km of railroads while the second round in June will be for 7,400 km more, Figueiredo said. Auction winners must build the railroads within five years, he said.

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