Government Suspends High Speed Rail Project for Third Time

08/13/2013 - 08h30

The Dilma Rousseff administration yesterday suspended, for the third time, the opening of bidding for the construction rights of a proposed high-speed rail link between Rio de Janeiro and São Paulo, with no new date being set. The project was once described as Rousseff as a priority, but the bidding will now not occur until the President's second mandate, if she wins one.

As Folha has learned, the government does not consider that the time is right to press ahead with the project, given the proximity of next year's presidential election, and it has shelved the plans for at least another year.

There are concerns that the project, estimated at between R$35.5 billion (US$ 15.5 billion) and R$55 billion (US$ 24 billion), could be used against the government at a time when protestors have been demanding improvements in urban public transport, particularly to the Metro. The government claims there is money enough to fund improvements in existing train and Metro systems as well as to invest in the new Rio - São Paulo bullet train.

The government says the decision was taken because two of the consortiums involved in the project - one German and one Spanish - requested that the bidding be delayed. This meant that there was only one other party - a French consortium- prepared to participate in the bidding at present.

The President was therefore obliged to suspend the bidding in order to ensure competition for the project. The bidding, which was due to occur this Friday, would have determined which companies will provide equipment and which will manage the service.

However, while the two companies involved had requested that the opening of the bidding be only temporarily postponed, the decision of the government was to shelve it indefinitely. Nonetheless, advisors to the President have affirmed that it will be possible to open the bidding by the end of the year or in early 2014.

On announcing the indefinite suspension of the bidding, the Minister for Transport Cesar Borges reiterated that the President "does not want the project stopped." Other parts of the project are still going ahead, such as the contracting of firms to build the track, and the deadline of 2020 for the completion of the project has not been changed.

Translated by TOM GATEHOUSE

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	Editoria de Arte/Folhapress
	Proposed high-speed rail link between Rio de Janeiro and São Paulo