Brazil's railway sector is expected to invest 30 billion reais (US$6 billion). Fernando Paez, executive director of the Brazilian National Railway Transport Association, told: "Due to the contract renewal, this is actually a conservative prediction."

The Brazilian National Railway Transport Association pointed out that these early contract extensions can only bring in 30 billion reais. The renewal approved by the Investment Partnership Program is expected to increase the rail sector’s share of all transportation in the country from 15% to 31%. "On the one hand, we have a timetable for contract extension. On the other hand, many of these companies are publicly listed." Paes explained other possibilities for new investors.

In addition, the performance during COVID-19 is also very good. Overall, taking into account all sectors and products of transportation, there will be a slight decrease of 0.4% in 2020 year-on-year. "It can be said that this sector has not been affected by the pandemic. The directors believe that we have had a smaller decline in industries with a smaller share, so their impact is not large, and we have seen fluctuations in the ore.

During the epidemic, the Brazilian economy performed well. Overall, considering all industries and product transportation, there will be a slight decrease of 0.4% year-on-year in 2020. Compared with the same period in 2019, the volume of ore transport decreased by 1%.

Railway investment

One opportunity highlighted by the directors is Ferrogrão, with an estimated investment of R$8.4 billion. The project aims to transport coffee beans by rail from Sinop in Mato Grosso State to Itaituba, Pará, where is the port of Miritituba on the Tapajós river. This so-called green space is still being planned, and Saudi Arabia even regarded it as an investment in 2017.

The head of the Brazilian National Railway Transport Association said that another plan is the East-West integration railway project. The railway will be tendered later in 2021, with an estimated investment of 5.4 billion Brazilian reals ($1 billion). The East-West Convergence Railway is the largest project approved in 2021.

In addition to investment in railways, the growth of the industry will also require other products, such as steel rails that need to be imported from abroad.

The most attractive tenders for foreign investment are Ferrogrão and the East-West Railway Project, which will sign new contracts. In addition to the extension line, the so-called short line makes private investment possible a shorter, more private railway, which powers the system and connects the main projects.Editor/Huang Lijun