HomePublicationsInsightsAfter 27 years, Dilma inaugurates North-South stretch, still without operator

After 27 years, Dilma inaugurates North-South stretch, still without operator

Connection between Goiás and Tocantins is ready, but the harvest should only flow in 2015.

ANÁPOLIS (GO) – The expectation of inauguration of the stretch between Palmas (TO) and Anápolis (GO) of the North-South railway by President Dilma Rousseff, next Thursday, caused intense agitation at the construction site last week. The climate among workers and entrepreneurs in the region's dry port was a mixture of hope, for seeing the installation of the tracks 27 years after the beginning of the works on the railroad, waiting, and skepticism.

The fact is that the receipt of products from the North region to the heart of the cerrado and the flow of agricultural crops to the ports in the North and Northeast depend on the definition of who will operate this North-South stretch. In an election year, the government is in a hurry to inaugurate the work, but only last Monday did it summon the companies interested in operating the line, the first of a new model of use of the network not yet tested, which presupposes two independent figures: the concessionaire of the line and the operator, who will transport the cargo.

— To use the line, I need to know who will operate, what the price will be and what the condition of the port of Itaqui (MA) will be like to receive my cargo, because it does not have terminals adapted to receive my products — complained Sebastião Osmar Albertini, manager of Granol's Anápolis unit, an agricultural production and marketing company on the edge of the tracks, with the potential to transport one million tons a year through the North-South route.

'Nowhere to connect'

Albertini does not expect to take the approximately 200 trucks a year off the road that could be replaced by using the railroad. The terminal that will receive soybean meal in Itaqui should only be ready in November, when the agroindustry will be in the maintenance phase to receive the next harvest. With the railroad active, it is estimated that from the ports in the North, sea freight will be reduced by at least four thousand kilometers to North America and Europe. The businessman also doesn't know what the solution will be to supply the market with wagons during the harvesting period, when he can use the North-South route.

— This year, I don't believe we will have the opportunity to operate (in Norte-Sul), because there is no port structure to receive the finished product, in our case, soy bran, and put it on a ship. There is even a structure today (in Itaqui), but focused on grains and not on finished products – he predicted.

Rodrigo Vilaça, president of the National Association of Railway Transporters (ANTF), reinforces the assessment:

— Anápolis is not ready, this year it will not have any impact (in the volume of cargo transported), it does not have an intermodal yard, it has nowhere to connect — he said.
Additional expenses of BRL 400 million

Unlike the businessmen, Valec, the state-owned company responsible for building the railroad, is much more optimistic and predicts that Norte-Sul “will provide, as of October, the shipment of soybean meal, from the 2013 harvest, to the port Itaqui, when the loading facilities of the Granol industry will be operational”. According to Valec, until a new company shows interest in operating the line, cargo transportation may be carried out by the company VLI, which already operates the North-South stretch between the states of Maranhão and Tocantins.

The delivery of the North-South stretch between Palmas and Anápolis was promised for 2010, still in the Lula government, and later included in President Dilma's campaign video, in the same year. The work had an initial budget of BRL 4,28 billion, which was increased by about BRL 400 million in recent years to cover exceptional expenses, due to deficiencies in the original project, overbilling pointed out by the Federal Court of Auditors (TCU) and poorly executed and redone works. Between Dilma's first campaign and the one to come, the former president of the state-owned company Valec José Francisco das Neves, Juquinha, was arrested in the Federal Police's Trem Payer operation for concealing and dissimulating the origin of money from contracts for stretches of the North South.

Part of the remaining works, contracted by Valec, must still be completed after the inauguration, such as the completion of concrete slopes (ramps). According to Valec, of the total of these contracts, which add up to R$ 400 million, R$ 238 million have already been effectively spent. Contracted companies must also offer maintenance in a period immediately after the inauguration, in contracts that run until February.

— For 2015, the stretch from Anápolis will be working with everything ready, taking the next agricultural harvest — said Bento José de Lima, Director of Operations at Valec.
Shipping can drop by up to 30%

Despite the problems, the euphoria is great in Porto Seco Centro-Oeste, the largest in the country away from the coast. Grain transport by truck has an average loss of between 22% and 25%. The railroad should reduce freight rates by 30%, calculates Edson Tavares, superintendent director of Porto Seco Centro-Oeste, in Anápolis. Companies in the region in the sectors of vehicles, pharmaceutical products, thermal insulation, food, among others, foresee the possibility of exporting 30% more by rail.

— The railroad will give a new logistics reengineering here in the region. We have a volume of cargo in our region that leaves through the ports of the South and this cargo will start to leave through the ports of the North - predicts Tavares.

At the northern end of the railroad, the government is still waiting for private companies interested in the undertaking to bid for the work on the stretch between Açailândia (MA) and the port of Barcarena (PA). The plan to inaugurate the stretch still in this government runs the risk of not being carried out and not even in the next one, if the pace of construction of the rest of the Norte-Sul is taken as a basis.

With no connection to Barcarena, access to the ports in the North is now done by road or by the Carajás railroad, which connects the North-South to the port of Itaqui. On the south side, the most advanced part of the work is the section between Ouro Verde de Goiás (GO) and Estrela D'Oeste (SP), budgeted at R$ 2,7 billion. The original deadline for delivery of the work was March 2009, but with the postponements it was extended to April 2015.

Source: The Globe

By Danilo Fariello

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