After facing years of delay and seeing its budget burst, involved in accusations of overbilling and technical problems of all kinds, the North-South Railway finally has a reason to celebrate. The Brazilian Institute for the Environment and Renewable Natural Resources (Ibama), calculated the value, released the operating license for the North-South stretch, which connects the city of Palmas (TO) to Anápolis (GO). The authorization, signed by the president of Ibama, Volney Zanardi, authorizes the state-owned company Valec to put the 855 km track of the railroad into operation.
Today Norte-Sul only operates on the 719 km North section, which connects the city of Palmas to Açailândia, in Maranhão, a route that is used by the mining company Vale. The new section of the railroad will have its operation tendered by Valec, which provides for the operation of the section to several companies, and not just a single operator, as in the current concession model. The offer should take place in the coming months, after the contracting of an “independent railway operator”, who will be responsible for providing services to third parties interested in transporting cargo.
The operating license marks the end of an exhausting process for the government. Work on the stretch was resumed by former President Luiz Inácio Lula da Silva in 2007, after the Norte-Sul project had been abandoned by previous governments for more than 20 years. Launched during the government of then President José Sarney, the Norte-Sul crossed the two governments of Fernando Henrique Cardoso with an advance of just 215 km. The undertaking was only resumed after the launch of the Growth Acceleration Program (PAC).
At the time, Lula announced that R$ 4,2 billion would be injected into the construction, which should have been completed by October 2010. With a delay of three years and six months, therefore, the section now obtains its operating license.
In order to put the route in conditions of operation, Valec was obliged to sign a series of contracts for the execution of remaining works. In several audits carried out in recent years by the Federal Court of Accounts (TCU), recurring overpriced contracts were found. In many cases, Valec signed the terms of acceptance of works with contractors, without the works having actually been concluded.
Through the Law on Access to Information, Valec informed Valor that these “remaining works” cost a total of BRL 407,78 million more to the undertaking. These contracts are still ongoing. As a result, the total cost of the route already exceeds R$ 4,5 billion, according to Valec itself.
With the completion of the Palmas-Anápolis section, it now remains for Valec to deliver the southern section of the railroad, which will connect Ouro Verde (GO) to Estrela D'Oeste, in the interior of São Paulo. The 680 km line has works in progress. Until last year, the deadline for completion was July this year. In the balance of the PAC, Valec assumes that the stretch will be delivered by the end of this year.
The North-South route that crosses the Midwest of the country will play a vital role in several industries that are installed or under construction between the States of Goiás and Tocantins, involving 42 industrial ethanol plants and 20 biodiesel plants. In Valec's accounts, the stretch should boost production in the Cerrado region and generate around 270 direct and indirect jobs in communities in the interior of the country. A total of 13 multimodal yards are expected to come into operation. In Tocantins, the route crosses a total of 14 municipalities. On the side of Goiás, it advances through another 23 cities.
The railway concession plan announced in August 2012 by President Dilma Rousseff removed from Valec the goal of building a last link of the railway in the far north of the country, from Açailândia to the port of Vila do Conde, in Barcarena (PA). The work, which would be carried out by the state-owned company, entered the list of railroad concessions and was even announced as the first stretch that would pass into the hands of the private sector. The government, however, ended up giving up on the proposal, when faced with resistance from businessmen in funding the construction of a railroad in the middle of the Amazon, based on a concession offer considered unattractive.
With a total length of 2.244 km and a total budget of US$ 6,7 billion, Norte-Sul is currently the seventh most expensive transport project in the world, according to calculations by the Ministry of Finance.
Source: Valor Econômico
By André Borges | From Brasilia
