Tuesday, February 28, 2012

(BN) Brazil Bullet Train to Be Ready in ‘22, Minister Passos Says

Bloomberg News, sent from my iPhone.

Brazil Bullet Train to Be Ready in '22, Minister Passos Says

Feb. 27 (Bloomberg) -- Brazil's high speed train connecting Sao Paulo and Rio de Janeiro will be ready by 2022, Transportation Minister Paulo Sergio Passos said.

The government will auction rights to build and manage the railway between Brazil's two most populous cities in two stages, Passos said in an interview from his office in Brasilia. The first stage, to be completed by December, will decide on the technology and operator for the train, while the second stage, in which the consortium that will build the infrastructure will be chosen, will happen in 2014, Passos said. Construction will probably take six years, he added.

The biding process for the 511-kilometer (318-mile) high- speed train was cancelled three times in Dec. 2010, April and July last year, because not enough bidders signed up for the auctions. The government is now reviewing the auction rules, Passos said.

"The fact that we didn't have a more detailed study was creating uncertainties to private investors," Passos said in the interview. "These uncertainties translated into risks that were monetized by eventual bidders, putting the value of the investment at much higher level than what the government had estimated."

According to the original project, the planned investment was 33 billion reais ($19.3 billion), and the winning bid would be the lowest fare below the minimum level of 199.80 reais set by the government for the Rio- Sao Paulo trip. The minister didn't provide new values. The concession contract is for 40 years, he said.

A new project for the bidding process will be delivered to President Dilma Rousseff in the next few days, Passos said.

Editors: Fabiola Moura, Adriana Brasileiro

To contact the reporter on this story: Carla Simoes in Brasilia Newsroom at csimoes1@bloomberg.net

To contact the editor responsible for this story: Helder Marinho ou hmarinho@bloomberg.net

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