Bullet train could cost up to 45% more than expected

The total cost of the high-speed train could reach R$ 50 billion, if we consider any unforeseen circumstances that could crop up during the work, such as changes to the route because of environmental considerations or an increase in expenses with the boring of tunnels, for example. According to the legislative consultant of the Senate, Marcos José Mendes, studies suggest that the cost of this type of work could be, on average, 45% higher than that planned before the development started.

The project for the Brazilian bullet train, which is to connect the cities of Campinas, São Paulo and Rio de Janeiro, was discussed today at a public hearing at the Infrastructure Commission of the Brazilian Senate. The construction work has been budgeted initially at R$ 33 billion, and out of this total R$ 20 billion shall be financed through a special credit line from the National Bank of Economic and Social Development (BNDES) and R$ 3 billion shall come from the Government for compulsory purchases and environmental compensation. A further R$ 10 billion shall be injected by the investors themselves.

Mr. Mendes, who has produced technical articles about the issue for the Center of Consultancy Studies at the Senate, ensures that the Government expenses on this construction work should end up between R$ 15 billion and R$ 35 billion. In his opinion, with up to R$ 20 billion it is possible to construct a hydroelectric power unit like Belo Monte, or build 8.3 thousand km of goods railways, or connect 12 million housing units to the sewerage system, or double the length of the Underground in a city like São Paulo.

“Is it really worth spending all this Government Money to construct the bullet train?”, he asked. He also said that the project conflicts with the current economic and social policy of the Federal Government.

For the transport consultant Joseph Barat, the Government should invest more heavily in goods railways rather than giving priority to passenger rail transport. “The traffic congestion on the Via Dutra (the road connecting Rio de Janeiro and São Paulo) is not caused by buses or cars, but by lorries, which could be replaced by goods trains”.

He suggested that soon there shall be the implementation of a system with mixed goods and passenger rail transport. The General Director of the National Land Transport Agency (Agência Nacional de Transportes Terrestres - ANTT), Bernardo Figueiredo, defended the bullet train project, remembering that this technology is the most suitable for the demand of passengers along the Rio de Janeiro – São Paulo axis, as this is a service that is reliable, safe, predictable and that has a low price tag.

“Brazil must be more daring, and we cannot be towed along by technology. The bullet train should transport 32 million passengers in its first year and shall reach 100 million after 40 years.
The superintendent of the Projects Area of the BNDES, Henrique Amarante da Costa Pinto, has also presented arguments in favor of the construction of the high speed train. He believes that the demand for passengers between Rio de Janeiro and São Paulo is higher than that of other locations which have already adopted the bullet train.

Mr. Pinto also remembers that the airports and roads in the region are saturated and that the construction of medium-speed trains would not meet the needs of the population, which is migrating more and more from road transport to air transport.

Last week, the ANTT postponed, for the second time, the auction which shall select the companies responsible for the construction of the bullet train. The tender, which was originally scheduled for last December, had already been postponed to April, and now shall only occur on 29 July.

The Senate shall now vote, either today or tomorrow (13th), Provisional Measure 511/10, which authorizes the loan of up to R$ 20 billion from the BNDES to the consortium that shall construct the bullet train. The project also plans for the creation of a special company, Empresa de Transporte Ferroviário de Alta Velocidade S/A, linked to the Ministry for Transport. This Provisional Measure locks the voting agenda of the House and must be voted by Friday the 15th, as its validity ends on Sunday the 17th.