A year’s delay, but $17bn Brazil HSR still ‘on track’

The Brazilian government is insisting that a $17bn high-speed rail project continues as planned despite a third postponement for stage one of the bidding.

The first phase of bidding for a BRL38 billion ($16.7 billion) high-speed rail project in Brazil has been put back for at least a year with only one consortium set to deliver a bid by this Friday’s deadline.

According to reports, government officials conceded that a group led by France’s Alstom and including state-owned French rail company SNCF was the only consortium prepared to put money on the table at this stage.

However, unnamed German and Spanish investors said they were interested in bidding and requested a postponement to give them more time – a wish that has been granted.

In a statement, Brazil’s Transport Minister Cesar Borges insisted that the delay was all about wanting a more competitive process. “We want the largest number of participants in the bidding process,” he said.

The project has already suffered two delays, with a previous tender in 2011 cancelled due to the absence of bids. Originally, it was hoped that the project would be completed in time for the 2016 Olympic Games, but the completion target is now four years later.

Reuters said Borges had stressed that the latest revision to the schedule was not related to an anti-trust investigation of foreign engineering companies over alleged price fixing in building and maintaining rail and metro lines in Brazil.

However, the backdrop to the decision is the mass public protests that afflicted Brazilian cities in June with the use of public money (or ‘misuse’, according to the protesters) at the heart of the demonstrations. In this context, awarding a key infrastructure contract to a sole bidder would be controversial.

The first phase of bidding relates to the selection of technology suppliers, service operations management and system maintenance. The statement said that the second phase of bidding, which will see the selection of companies responsible for the project’s infrastructure, remains on course for 2015.

The statement also said that implementation of the project remained on course for 2020. The 260-mile high-speed link between Sao Paolo and Rio de Janeiro is at the heart of a $100 billion Brazilian infrastructure plan that also covers roads, ports and airports.