Government tries to circumvent Amazon crisis and pitch railway
In spite of the image crisis abroad, caused by the growing deforestation of the Amazon, the government will begin this week a search for large investors in Ferrogrão (Grain Rail), one of the boldest projects in its portfolio of infrastructure concessions. The 933-kilometer railway between Sinop in Mato Grosso and Miritituba in Pará, will be object of a virtual road show organized by the Ministry of Infrastructure and the Investments Partnerships Program (PPI) with international groups that operate in the sector, funds, construction companies and potential lenders.
The talks begin on Thursday and will go through August 7. Meetings have been confirmed with representatives of Spanish multinationals Sacyr and Acciona, Japanese giant Sumitomo, China Communications Construction Company (CCCC) and China Railway Construction Corporation (CRCC). Also on the list are Brazilian companies specialized in logistics, such as VLI and Hidrovias do Brasil, and multilateral organizations that may potentially support the project with financing - case of CAF - Development Bank of Latin America and New Development Bank, the BRICs bank.
After that, on August 10, the Foreign Ministry and Infrastructure Minister Tarcísio Freitas will conduct a round of discussions with Saudi Arabia's sovereign wealth fund. Last October, during a visit to the country, President Jair Bolsonaro received from Crown Prince Mohammed Bin Salman the promise of $10 billion in investments by the fund in Brazil. On the occasion, Ferrogrão was pointed out as one of the top priorities for future Saudi investments.
The railway has a cost estimated at R$8.4 billion, concession of 69 years, and its final viability studies were submitted to the Federal Court of Accounts (TCU) this month. The government wants to hold the auction in 2021, turning it into the main alternative for transporting grains through the so-called Northern Arc when it is operating - the forecast is end of the decade.
Yet there are challenges along the way. The tracks will pass through the Jamanxim National Park, a conservation unit managed by the Chico Mendes Instittue of Biodiversity Conservation (ICMBio), and the railway sits close to two indigenous reservations. All of that at a time of strain for Brazil in the international community because of its policies for the environment and indigenous people.
Market sources who asked not to be named stressed this point as a factor of concern. They acknowledge the quality of the...
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