New railway project

INTRODUCTION

The growth of the state of Paraná, with a GDP of USD 115 billion that represents the fourth or fifth largest economy in the country, cannot prescind a railway solution.

In recent decades, the agricultural production and the Port of Paranaguá have become modernized, but the field-port connection remains with the same obsolete railway infrastructure.

Due to its characteristics, Paraná has a major participation in the agribusiness sector.

The State produces 33% of the Brazilian soybean and maize production, 25% of the national poultry production and 16% of the production of pork.

Moving the production of the West of Paraná is limited by two major bottlenecks outside the Ferroeste concession area. In a few segments, the railway capacity has become saturated, in particular in the Serra da Esperança (between the cities of Guarapuava and Ponta Grossa) and the downhill stretch of Serra do Mar (between Curitiba and Paranaguá).

The shortcoming in the West-East railway infrastructure also impairs the movement of the production of the state of Mato Grosso do Sul that, in 2016, was the largest national brains producer and of Paraguay, a grain production country.

In order to ensure continuity of development for this huge productive region, that crosses boundaries, a new railway route to the sea must be put in place, the largest project in the state of Paraná in the last six years.

Trains are the best alternative to reduce cost and make Brazilian production more competitive on the international market. For this reason, the inversion in the regional transportation matrix promotes railways and increases the price for the transportation of commodities, bulk products and low value added products, typical freights of the railway modal, requiring the transportation of large volumes over long distances.

Farmers want a new railway, the Port of Paranaguá needs one, the Government of the State and the Federal Administration, through the National Agency for Overland Transportation (ANTT - Agência Nacional de Transportes Terrestres) and the Ministry of Agriculture have already made it clear that they approve of the project of Paraná. The West Export Corridor project will promote the establishment of a new cycle investments and the proliferation of a number of development hubs along the new railway.
 

EXPORTS

Currently, the total movement of products in the Port of Paranaguá, the second largest in Brazil, is of 45 million tonnes, of which 80% of the total import and export demand is from the terminal that receives freight through the road modal.

The volume of railway freight currently corresponds to only 9 million tonnes, i.e., 20% of the production of the terminal.

For 2030, the total volume of freight forecast by the Development and Zoning Plan (Plano de Desenvolvimento e Zoneamento - PDZ) for the state of Paraná terminal will be of 80 million tonnes, nearly double the current, with the railway volume, under the most pessimistic scenario, continuing to be the same 9 million tonnes, reducing to 11% its share of the total production of the Port.

The West region alone produces 14 million tonnes/year, but only 440 tonnes tonnes of these are transported by railway to the port. In 2035, the forecast production for the West region is of 21 million tonnes/year.

A set of actions addressing the transportation system is required for the logistics chain to operate without major bottlenecks that strangle imports and exports through the port the ideal system to increase the capacity of the agribusiness is the railway, given there is no margin to increase the capacity of BR 27 7, already in two lanes, and, in addition, the implementation of a third lane in the Serra do Mar Mountain region is very complex.

The railway that currently addresses the Port of Paranaguá is operated by the Rumo concession holder. The railway is a historic one, centennial and of major cultural and tourist interest, built between the years of 1880 and 1885. Its ancient geometry does not promote good operational performance from the freight trains that run on it down to Paranaguá.

Having just this way a way to reach the Port of Paranaguá, subject to blockage in the event of landslides in the Serra do Mar is a reason for concern.
 

PROJECTS

The need and urgency to build a East/West railway corridor, linking Dourados to Paranaguá have been acknowledged by the Federal Government’s Logistics Investments Program (Programa de Investimentos em Logística – PIL).

The project for the new railway was entered in PIL 1 and PIL 2, but excluded in PIL 3, in 2015, make it no longer a logistic priority for the Union.

In 2017, however, a study undertaken by EMBRAPA on request from the Ministry of Agriculture rehabilitated the railway construction project in the list of 31 priority works to guarantee competitiveness and expansion for Brazilian grain production for the coming 10 years.
 

PUBLIC CONSULTATION

With the objective of obtaining inputs and suggestions for the new railway construction project between Dourados (MS) and the Port of Paranaguá/Pontal do Paraná (PR), the West Export Corridor, the Government of the State of Paraná, the State Department of Infrastructure and Logistics and the Paraná Oeste Railway - Ferroeste prepared a Public Consultation cycle for the purpose of increasing the debate around the need to update the railway modal in the State of Paraná.

Public Consultations were held in the cities of Curitiba, Guarapuava and Cascavel, in Paraná, where Ferroeste’s headquarters and railway terminals are located, and in the city of Dourados, state of Mato Grosso do Sul, within the railway concession area.
 

PMI – PROCEDURE FOR MANIFESTATION OF INTEREST

At regional level, the Government of Paraná looked for alternatives to the railway problem for the West Corridor. Through Decision no. 04/2016 published by the Concession Management Council (Conselho Gestor de Concessões – CGC), a Workgroup targeted at developing new railway projects for the state of Paraná was established.

The Workgroup concluded for the need of undertaking technical-operational, economic-financial and environmental studies to structure the “West Export Corridor Project”.

The technical-operational, economic-financial and environmental studies to structure of the project will be tendered by way of publishing a public Notice to Tender to call in interested companies.

The estimated cost of the study is of BRL 24 million, with the average cost estimated for the implementation of a new railway and the new trunk that, together, should reach an extension of 1000 km of rails is of BRL 10 billion.

The West Export Corridor will be comprised by two railway stretches: Stretch 1 - Guarapuava to Port of Paranaguá, in Paraná (state-level concession). Article 21 of the Federal Constitution establishes that the concession of services crossing state boundaries, or linking ports to national borders, are of federal competence; Stretch 2 - Dourados, in Mato Grosso do Sul, to Guarapuava, in Paraná (Ferroeste already holds the federal sub concession for this stretch).

Stretch 1 of the new state concession railway connecting Guarapuava to the port will be 400 km an extension, coming down the mountain stretch in parallel to BR-277. Concession for this stretch will be at state-level.

Stretch 2 foresees the extension of a trunk from Cascavel to Maracaju (MS) with the construction of 350 km of railway.

The project further foresees revitalization of the existing 250 km stretch operated by Ferroeste between Guarapuava and Cascavel. This stretch will also be part of the sub-concession.

Mapa do projeto


The route used by the new railway cannot use the existing railway grid operated by Rumo, not even its Domain Band. It also offers operational capacity reserve for independent railway operators, establishing interoperability rules between the two new stretches and the existing grid.

The documents providing technical support for the project are: PDZ for the Port of Paranaguá; ANTT Input Collections 9 and 16; the State Transportation Logistics Plan (PELT - Plano Estadual de Logística de Transporte) of the Forum Future 10 Paraná; and the “West Export Corridor” study of the State Government of Paraná.

In parallel, the State Government undertakes the State Strategic Transportation Logistics and Infrastructure Program (Programa Estratégico de Infraestrutura e Logística de Transporte do Estado) – BID I Integration, with the Inter-American Development Bank, for the establishment of new logistic hubs in Paraná. Investments are on the order of USD 435 million (BRL 1.4 billion).

The Ferroeste freight terminal should be the first logistics hub to receive the IDB investment targeted at the strategic storage areas.


 

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