Amazon railways: cost reduction versus impacts<\/h2>\n
Jair Bolsonaro’s government argues that expanding the rail network will increase the competitiveness of Brazil\u2019s commodities. The extension of the network could reduce domestic freight costs by a third, Marcelo Vieira, former secretary for land transport at the Ministry of Infrastructure, told Di\u00e1logo Chino. (Vieira was replaced shortly after this interview.)<\/p>\n
\u201cTrains are the best option to take large volumes of products with low added value [such as grains and minerals] from producing regions to consumption and export centres,\u201d he said.<\/span><\/p>\n Types of partnership<\/strong><\/p>\n A concession<\/strong> contract passes the operation of the public railway to the private sector. The company and the government share responsibility for the works.<\/p>\n Authorisation<\/strong> involves the company assuming more responsibilities in the works, such as requests for environmental licenses and the search for investors and rail operators.<\/p>\n \n <\/div>\n <\/div>\n The ministry claimed that using railways to transport cargo instead of roads would reduce CO2 emissions from that sector by two-thirds, without providing details. The expansion of the network, it says, would reduce road accidents, and boost regional economies and services, creating jobs. The modernisation of 10,000 km of track for passenger rail transit<\/a> would also be integrated into the improved network, the ministry added.<\/p>\n However, Andr\u00e9 Ferreira, director of the Institute of Energy and Environment (Iema), ciriticised the low level of product diversity on Brazil\u2019s railroads. On average, 73% is iron ore, and the remainder is agricultural and other products.<\/p>\n \u201cRailways have to be a real option for cargo carried by trucks today, but the lines currently cutting through and projected for the Amazon serve mostly agribusiness and mining,\u201d he said.<\/p>\n Today, 67.7% of cargo in Brazil travels by road, compared to 21.5% by rail and 9.5% by waterways and cabotage (navigation between maritime ports), according to the country\u2019s National Logistics Plan<\/a>. Planned concessions and authorisations are expected to increase the volume transported by rail to 40% by 2035. <\/div>\u201cThe projects cannot be discussed in isolation, because they integrate large commodity production and export networks that will bring serious socio-environmental impacts,\u201d Ferreira said.<\/p>\n Neto, from UFRJ, added that the government is transferring almost all the responsibility for conducting the works to the private sector. Companies can \u201ctry to circumvent social or environmental interests in the projects. Some requests [for authorisations] are from micro-companies and may only be reservations for future negotiations,\u201d he said, referring to companies\u2019 practice of registering and reserving a stake in a project for future sale or participation.<\/span><\/p>\n Investment in infrastructure should boost commodity exports through Brazil\u2019s so-called Arco Norte<\/a>, a corridor of roads, ports and railways that traverses the Amazon and Cerrado regions, connecting major transit hubs and exporting goods via north and northeastern ports, rather than those in the south. It is receiving growing attention from governments and investors, since it would cut the distances and costs involved in reaching markets in Europe or China, and other destinations via the Panama Canal.<\/p>\n Today, the ports of the Arco Norte already export over 30% of Brazilian soy and corn and import similar amounts of fertilisers, according to the National Supply Company<\/a> (Conab).<\/p>\n The Arco Norte would also facilitate access to the mineral, oil and natural gas reserves<\/a> discovered in 2021 in Guyana and Suriname. Gas reserves in these countries exceed a combined 283 billion cubic metres \u2013 equivalent to the entire reserves of Peru<\/a>, which generates 40% of its energy from natural gas. As a result, Petrobras, ExxonMobil and Chevron are among the companies eyeing investment.<\/p>\n A concession<\/a> for 1,537 km of the North-South railway that connects the states of S\u00e3o Paulo and Par\u00e1, and the renewal<\/a> of the contract for 892 km of the Caraj\u00e1s railway between Par\u00e1 and Maranh\u00e3o are already assured for the Arco Norte. Some 11 billion reais (US$2.2 billion) in private investment from mining company Vale and railway operator Rumo Log\u00edstica, among others, is expected.<\/p>\n Still up for grabs is the 888-km Midwest Integration Railroad, known as Fico, between Mato Grosso and Goi\u00e1s. A further 646 km of the same line, from Mato Grosso to Rond\u00f4nia, are being studied.<\/span> <\/div>Of the 1,527 km planned for the West-East Integration Railroad, the Fiol, from Bahia to Tocantins, a 537 km concession<\/a> has already been awarded. The railway connects to Porto Sul in Ilh\u00e9us, which has been criticised for its impacts on springs and artisanal fishing<\/a>.<\/p>\n Both networks will link to the North-South Railroad and connect ports in Maranh\u00e3o, in the northeast, and S\u00e3o Paulo, in the south.<\/span><\/p>\n Ferrogr\u00e3o (Grainrail) is a 993-km line connecting Mato Grosso to Par\u00e1. Its objective is to strengthen domestic trade and exports, and cut logistics costs and grains wasted in transportation via the BR-163 highway. The premise is to carry soy and corn out of Mato Grosso and export them to China, and to import fertilisers and oil derivatives.<\/p>\n Original plans were drawn up more than a decade ago but Ferrogr\u00e3o has become a priority for Jair Bolsonaro\u2019s government. The Federal Audit Court is analysing<\/a> the project and demanding a prior consultation<\/a> with indigenous peoples affected by it.<\/p>\n The Federal Supreme Court, Brazil\u2019s highest judicial authority, is also looking into Ferrogr\u00e3o. A March injunction issued by Minister Alexandre de Moraes paralysed<\/a> the railway concession until the verdict of a case filed by the Socialism and Liberty Party (PSOL) against the reduction of Par\u00e1\u2019s Jamanxim National Park, through which the network would pass. That reduction was confirmed by a legally enforceable provisional measure issued by former President Michel Temer in 2016. Currently, there is no date for the trial. <\/div>An analysis<\/a> by the Federal University of Minas Gerais (UFMG) found that Ferrogr\u00e3o\u2019s works will affect peoples and preserved areas of the Cerrado and Amazon. \u201cLand speculation and the clearing of vegetation along the railway line will push the arc of deforestation into the forest,\u201d warned William Leles, from UFMG\u2019s remote sensing centre.<\/p>\n Nor would access roads and loading and unloading terminals be able to support the estimated 52 million tonnes of goods per year that the railroad would transport, UFMG pointed out. \u201cStudies for the operation of the railway do not consider this, nor the cumulative socio-environmental impacts of railway expansion in the Amazon,\u201d said Leles.<\/span><\/p>\n Brazilians want to know what the vision for the future is and what priorities the candidates have for the country\u2019s infrastructure<\/p><\/blockquote>\n Ferreira, from Iema, also questioned the need for works such as Ferrogr\u00e3o, since the existing outflow through the southeast is more viable. The projects for the North-South railway and S\u00e3o Paulo state\u2019s Malha Paulista network would distribute cargo through the southeast, where infrastructure is well established. This would reduce pressure on the north, where the Amazon and its people are located, he added.<\/p>\n The future of these projects could be determined by October\u2019s presidential election: Jair Bolsonaro will seek re-election and has built on previous governments\u2019 railway policies. Luiz In\u00e1cio Lula da Silva, the front-runner in the polls, has not yet articulated his plans for railways.<\/p>\n \u201cBrazilians want to know what the vision for the future is and what priorities the candidates have for the country\u2019s infrastructure. What we see so far are isolated projects, which add little in the long term,\u201d said Leles.<\/span><\/p>\n Since the 1970s, several railway projects between Peru and Brazil have been mooted. None have progressed.<\/p>\n The most controversial was the Brazil-Peru Transcontinental Railway<\/a> (Fetab), launched in 2014 to connect Acre, in northern Brazil, to the port of Bayovar, on the coast of Peru. The project would cut through what is now the Serra do Divisor National Park<\/a>, impacting rich Amazon biodiversity.<\/p>\n \u201cFor this reason, added to the lack of clarity on who would finance the project and the [lack of] political will on the part of the Peruvian government, it came to nothing,\u201d said Marc Dourojeanni, an engineer and renowned environmentalist.<\/span><\/p>\n Bi-Oceanic Railway<\/strong><\/p>\n In 2015, Chinese investors even expressed an interest in the project, but negotiations fizzled out, Dourojeanni said. According to China Railway Eryuan Engineering Co. Ltd (CREEC), however, the northern route ending at Bayovar was deemed the most viable, at least in terms of its topography, a 2016 presentation<\/a> by the company to Brazil\u2019s senate showed. It remains one of the few publicly available documents on the issue. Today, the construction of a highway cutting through the same region is still on the table.<\/p>\n Launched that same year, the Bi-Oceanic Railway<\/a> would link Santos, in southeastern Brazil, crossing Bolivia and reaching the port of Ilo, in Peru. The 5,000-km route would shorten the distance of Brazilian routes to the Pacific Ocean and, from there, to Asian markets. It also stalled due to lack of investment. In 2020, the Peruvian government claimed<\/a> a lack of interest on Brazil\u2019s part. Bilateral discussions<\/a> are ongoing.<\/p>\n Less memorable is the Iquitos-Yurimaguas Interoceanic Railway, which would connect these two important cities of the northern Peruvian Amazon, with 555 km of tracks. However, the Peruvian government ruled it out because it would pass through Pastaza Fan, a Ramsar wetland site of international importance and the largest in the Peruvian Amazon.<\/p>\n \u201cThese speeches or attempts to develop railways have not materialised because there is no clarity. We don’t have a connectivity policy,\u201d said Manuel Glave, senior researcher at Grade, a Peruvian development think-tank.<\/span><\/p>\n Brazil\u2019s railways are of interest to Chinese investors<\/a>, but their development depends on the country\u2019s greater alignment with Brazil\u2019s legal, political and environmental frameworks.<\/p>\n \u201cFew countries have such favourable conditions for China for infrastructure projects as Brazil does,\u201d said Tulio Cariello, Research Director of the Brazil-China Business Council, pointing to the availability of land and natural resources, as well as good political and bilateral trade relations.<\/p>\n \u201cBrazil began to open up to internationalisation in the 2010s, at the same time that Chinese companies were seeking new global opportunities for investment,\u201d he added. <\/div>Between 2007 and 2020, Chinese overseas foreign direct investment hit US$66 billion in Brazil, in sectors such as electricity (48%), oil and gas (28%) and mining (7%). But some projects have stalled.<\/p>\n In August 2021, China Communications Construction Company (CCCC) claimed<\/a> financial problems led it to abandon the construction of a mega-port in S\u00e3o Lu\u00eds, Maranh\u00e3o. The project is associated with land grabbing<\/a> and the forcible displacement of quilombola<\/em> communities. It is unclear whether these factors also influenced the construction company\u2019s decision.<\/p>\n With further information unavailable, the construction of the South Port by CCCC and its partner China Railway Group has not progressed<\/a>. An agreement<\/a> signed in 2019 between the government of Par\u00e1 and CCCC enabled feasibility studies for the implementation of a 492-km railway in the state. The project did not get off the ground with Chinese capital and is likely to be taken over<\/a> by Brazilian mining giant Vale.<\/p>\n![\"infographic](\"https:\/\/dialogue.earth\/content\/uploads\/2022\/05\/ferrovias-v01-EN_v2_02.png\")
Arco Norte takes commodities to international markets<\/h2>\n
![\"map](\"https:\/\/dialogue.earth\/content\/uploads\/2022\/05\/ferrovias-v01-EN_v3_01.png\")
Ferrogr\u00e3o generates conflicts<\/h2>\n
![\"protest](\"https:\/\/dialogue.earth\/content\/uploads\/2022\/05\/Indigenas_Amazonia_Ferrograo.jpg\")
Railways connecting to Peru<\/h2>\n
\nLaunched in 2015, the 5,000-km mega-project would link Santos in southeastern Brazil, to the port of Ilo in Peru, crossing Bolivia.
\n\n <\/div>\n <\/div>\nChina\u2019s interest in railways runs up against local issues<\/h2>\n
![\"graph](\"https:\/\/dialogue.earth\/content\/uploads\/2022\/05\/ferrovias-v01-EN_v2_03.png\")