Other Logistics

TCU authorizes early renewal of Vale´s railroad contracts to allow for further investment

Jul, 30, 2020 Posted by Sylvia Schandert

Week 202031

The Federal Audit Court authorized the early renewal of the concession contracts for the Estrada de Ferro Vitória a Minas (EFVM) and the Estrada de Ferro Carajás (EFC), managed by Vale S / A. The new contracts provide for investments of R$21 billion, of which R$8.5 billion will be in EFVM and R$9.8 billion in EFC, in addition to the use of the cross-investment mechanism, which allows the use of part of the amount for constructing new state railways with private investment.

In all, R$2.73 billion will be allocated to the construction of the Midwest Integration Railway (FICO) between Mara Rosa (GO) and Água Boa (MT). This stretch will transport grain production (soy and corn) from the Araguaia Valley, one of the largest soy producers in Brazil, to the North-South Railway, generating 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 the operation at the port of Ubu. The State still intends to use part of the amount collected for the purchase of material to be used on the Oeste-Leste Railway (FIOL), in Bahia.

For the acquisition of a fleet of trains for the two railroads, R$2.8 billion will be allocated and another R$600 million will be reserved to deal with works of urban conflict in 55 municipalities. In addition, R$11.3 billion will be invested in maintaining the operation. The amount to be paid by Vale will be approximately R$2.2 billion for both railways.

The Vitória-Minas Railway (EFVM) has a total length of 905 km and its route covers the majority of the Rio Doce valley. The main product from Minas Gerais to be exported is iron ore. The Carajás Railway (EFC), with have a  distance of 892 km, connecting the Port of Itaqui, in Maranhão, to the mineral provinces of Serra dos Carajás, in Pará. The Açailândia / MA region will be connected to the North-South Tramo Norte Railway, which allows goods to access the Port of Itaqui.

Infographic: Ministry of Infrastructure

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