Global IssuesBRAZIL: Soy Boom Drives Westward Expansion of Railroads
Despite challenges like high interest rates and high household electricity tariffs, the Brazilian economy has been growing at the highest rates seen in decades. Another problem that, although it has not stood in the way of growth, must be overcome is the costly use of roads for transporting farm products — an issue that is being addressed by the expansion of railway networks.
Driving the 215 kilometres between Cuiabá and Rondonópolis, in the west-central state of Mato Grosso, is an exercise in patience. The two-lane potholed road is lined with trucks going both directions, and passing one in this hilly terrain means taking your life into your hands.
Around 8,000 trucks a day drive along this stretch of the BR-364 road, the main connection between the main local production centres and foreign markets. The trucks, carrying mainly soy from Mato Grosso, then drive the remaining portion of the 2,000-kilometre route to the Atlantic ocean ports.
One solution to ease that burden on the road is the Ferronorte railroad, in the process of being built. It will connect the new agricultural frontier in the west and north of Brazil with the more developed south-central part of the country.
The railway sets out from the northwest border of the southern state of São Paulo, 1,056 km from Cuiabá, the capital of Mato Grosso. Railroad stations in three cities in Mato Grosso have already begun to operate.
The railway is to reach Rondonópolis in 2012, and two years later it should make it to Cuiabá, according to Francisco Vuolo, special secretary of intermodal transport logistics, a post created this year by the government of Mato Grosso.
A 90-year concession, renewable for another 90 years, for the Ferronorte railway line was granted five years ago to América Latina Logística (ALL), which refused to build the railroad all the way to Cuiabá, and only agreed to cover construction up to Rondonópolis.
The company did not want to run the risk of taking on some 500 million dollars in debt in such a long-term business venture, said Vuolo. He regretted that the concession would put the railway, and a large part of the country, 'at the mercy of private interests for 180 years.'
Meanwhile, demonstrations have been held to demand that the railway be extended all the way to Cuiabá. As a result ALL gave up the concession to that stretch of the route, and the state government will make sure it gets built, through an agreement with the national land transport regulatory agency ANTT and Brazil's federal rail company Valec.
The railway will be named for Senator Vicente Vuolo, the father of the secretary of intermodal transport logistics Francisco Vuolo. As a lawmaker, Vuolo senior, who died in 2001, was the driving force behind plans for a railroad linking Cuiabá and São Paulo, approved in a national law passed in 1976.
There will be no problem finding investors to build the Rondonópolis-Cuiabá stretch of railway. Firms from 'China, Germany and other countries' have already expressed an interest in forming a partnership, Francisco Vuolo said, because it will involve building 'just 200 km and gaining access to another 1,000 km,' by forming part of a broader transport system, which through other connections will provide access to ports on the Atlantic.
The railroad will not only be used to transport soy and other agricultural exports to port, but will also carry merchandise back inland to Cuiabá, a city of 550,000 people. Described as a 'utopian project' when it was first proposed by Senator Vicente Vuolo, the railroad now responds to a clear need for large-scale transport facilities.
© Inter Press Service (2011) — All Rights ReservedOriginal source: Inter Press Service