The reform in the modeling of the Brazilian railway system has to move towards market opening to facilitate the entry of a large number of companies and, thus, guarantee competitive prices for users of this means of transport. This is the opinion of railway expert Jake Rudham, who is part of the British government agency responsible for business in other countries, UK Trade Investment. The specialist, who is in Brazil to explore opportunities in the sector, spoke exclusively to Broadcast, the real-time news service of Agência Estado.
“Brazil needs a direction for the opening of the railway market”, said the representative. According to him, British companies are looking for international opportunities and envision the possibility of investments both in countries with great railway development, like the United States and Australia, and in needy markets, like African nations and the Middle East. “If Brazil wants to become one of the hot spots for investors, it needs to find a way to make the environment easier and more open for doing business,” said Rudham.
The specialist's opinion is inspired by the experience of the United Kingdom itself in the formation of the railway model that has been in force since the 1990s, when the country privatized the sector. The British adopted the open access model, the same as Brazil will implement from the next railway concessions. This system maintains a separation between train builders and train operators. The railroad's capacity is made available to companies specializing in freight transport. Capacity management is carried out by a body linked to the government, Valec in the Brazilian case and Network Rail in the United Kingdom.
Currently, seven companies operate freight on the lines that cross the United Kingdom. Prices are free and, according to the British expert, they are competitive to the point that the system recovers part of the market lost to road transport years before – only in rail passenger transport is there government intervention, which offers subsidies. “In a market where any company can operate freight, there is no need for price controls,” said Rudham. “The English economy is historically open and we've carried that principle into the rail system,” he said. Over the last decade, freight transport carried out by British railways has grown by around 50%.
Brazil
Rudham came to São Paulo for the first time this week to understand the intentions of the Brazilian government in the railway sector and find possible investments in the country for British companies. Therefore, he does not mention specific projects that are on the radar of investors in the Brazilian market.
The representative of the British government speaks of Brazil with enthusiasm in relation to the business opportunity, but makes reservations about the business environment. “Five years ago, foreign investors looked at Brazil with great enthusiasm, but the reality is that it is not the easiest place to do business,” said Rudham.
He said that many projects for the country are still on the table and that foreign investors need time to understand how business is conducted in Brazil. “But the country definitely has great potential and is recognized as a place of great opportunities”, said the expert.
Source: State Agency
