Brazil rolls back railway concession policy

- Friday, October 14, 2016

Brazil rolls back railway concession policy

Brazil's President Michel Temer has issued a decree revoking the open-access railway concession model which involved federal rail company Valec acting as a single license holder for usage rights for the federal rail system since 2013.

Instead of limiting transport of freight on railways to respective railway operators, Valec took over railway management in 2013 in a move to guarantee railway operators business by promising to buy up any lack of freight handling demand.

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However, this model will no longer be used. Valec will now focus more on project studies and developing solid railway transport system plans as opposed to railway operations, according to an announcement in the country's official gazette Diário Oficial da União.

With this new change, concessionaires will have more control over what freight will be handled on their respective railways, but they will have no Valec guarantee.

Construction of the Norte-Sul railway (CREDIT: Valec).