HomePublicationsInsightsMegarailroad that connects oceans enters Dilma's plan

Megarailroad that connects oceans enters Dilma's plan

China, Brazil and Peru are preparing a preliminary agreement to build a mega-railway that would link the two South American countries, creating a rail corridor between the Atlantic and the Pacific. The work is estimated at R$ 30 billion.

Folha learned that the Brazilian government will include sections of the Transoceanic railroad in the investment plan that President Dilma Rousseff will announce in June. Next week, the Chinese prime minister, Li Keqiang, will arrive in Brasília to close partnerships with the Planalto Palace.

The idea is for companies from the Asian country to participate in future auctions to take some of the parts of the package. Ministers and technicians from the Esplanada state that negotiations are advanced on the Campinorte stretch, which connects Goiás to Lucas do Rio Verde (MT), the Brazilian agribusiness belt, through which most of the national grain production passes.

There are Brazilian stretches that had already been launched in Dilma's 2012 concessions program, but until today they have not been auctioned.

According to the original design, the Transoceânica starts in Rio de Janeiro, passes through MG, GO, MT, RO and AC and, from there, goes to Peru.

The construction of an undertaking that would change the map of the international logistics system faces strong reservations due to the high cost of construction to cross the Andes Mountains.

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Already enthusiasts of the project, including President Dilma, argue that the stretch between the two countries would open an outlet for Brazilian products through the Pacific, making them more competitive.

Brazilian soybeans, for example, have two routes to reach China: the ports of Santos (SP) and Belém (PA). In the first, there are 30 days of travel across the Atlantic. In the second, leaving Belém, via the Panama Canal, there are 35 days.

A trip from Peru to China takes a similar amount of time. The big difference, there, is in the time between the producing region, Mato Grosso, and the port.

China depends on Brazilian agricultural products, but wants an alternative to the Panama Canal, under US influence. The need for a competing route ended up raising interest in Dilma's railway concession package.

In November, Brazil, China and Peru had already signed a memorandum of understanding in this regard. The goal now is to go a little further and try to set schedules for carrying out technical studies.

In July 2014, Rousseff and Chinese leader Xi Jinping ratified cooperation allowing Chinese investment in Brazilian railways.

The new phase of concessions will take place through an onerous grant (the company that makes the highest bid wins), contrary to the system adopted in 2012.

In the old design, which hardly aroused interest from the private sector, the National Treasury helped finance the initiatives. Today, however, there are no resources for this.

Source:  Price

By: Bettina Barros

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