TCU authorizes construction of the Central-West Integration Railway

The Federal Court of Auditors authorized the early renewal of the concession contracts for the Vitória a Minas Railway (EFVM) and the Carajás Railway (EFC), both managed by Vale S/A.

The new contracts, more modern and aligned with public interests, provide for investments of R$ 21 billion, of which R$ 8,5 billion in EFVM and R$ 9,8 billion in EFC, in addition to the use of the cross-investment mechanism, which allows use part of the grant value for the construction of new State railways with private investment.

In total, R$2,73 billion will be allocated to the construction of the Central-West Integration Railway (FICO) between Mara Rosa (GO) and Água Boa (MT). This stretch will transport grain production (soybeans and corn) from Vale do Araguaia, one of the largest soybean producers in Brazil, to the North-South Railway, creating access to the country's main ports.

The amendment to the contract also provides for the construction of a railway section between Cariacica and Anchieta, in Espírito Santo, enabling operations at the port of Ubu. The State also intends to use part of the amount collected to purchase material to be used on the West-East Railway (FIOL), in Bahia.

"It is the consolidation of an innovative solution for creating railways in Brazil without the use of public resources. Cross-investment, using railway concessions, is one of the Federal Government's main strategies to double this mode's participation in the national transport matrix. We are showing that budget restrictions will not be an impediment to developing the country's infrastructure", commented minister Tarcísio Gomes de Freitas.

For the acquisition of the fleet of the two railways, R$2,8 billion will be allocated and another R$600 million will be reserved for urban conflict works in 55 municipalities. Furthermore, R$11,3 billion will be invested in maintaining the operation. The amount to be paid by Vale in grant to the granting authority will be around R$2,2 billion for both railways.

Studies also point to the socioeconomic benefits of renewing contracts. They will be in the order of R$1,7 billion referring to the reduction in freight costs and external accident and environmental costs. Carrying out the planned investments will bring around R$287 million to the public coffers, through tax collection over the next six years. In addition, 65 thousand jobs are expected to be created. The contract renewal term is 30 years.

EFC and EFVM are considered the two safest railways in the country, with the lowest accident rates, and occupy the first two places in the Railway Environmental Performance Index, according to the National Land Transport Agency (ANTT).

HISTORIC

The Vitória a Minas Railway (EFVM) has a total length of 905 km and its route runs along the Doce River valley for a long time. The main product sold is iron ore from Minas Gerais and destined for export. The Carajás Railway (EFC), 892 km long, connects the Port of Itaqui, in Maranhão, to the mineral provinces of Serra dos Carajás, in Pará. In Açailândia/MA it connects to the North-South Railway North Section , which allows goods to access the Port of Itaqui.