Brazil metro projects cost overruns top US$6bn

Bnamericas Published: Monday, August 17, 2015
Brazil metro projects cost overruns top US$6bn

The budgets for Brazil's six main metro projects have increased to 32.4bn reais (US$9.29bn) from an original estimate of 10.8bn reais, with an average rise of 287%, according to BNamericas' Project Risk Analytics team.

Rio de Janeiro's metro line No. 4 has jumped 945% to 9.2bn reais from 880mn reais when the contract was signed in 1998. Works were halted from 1998 to 2009. Its estimated completion has been pushed back from 2014 to year-end 2018.

BNamericas' Project Risk Analytics tracks changes to estimates of project completions dates and overall costs, in Latin American industrial projects.

Phase one construction for line No. 4 (yellow) of São Paulo metro company CMSP has risen 381% to 3.80bn reais from 790mn reais when awarded in 2006.

Overruns and delays have been due to the slow process of expropriations, as well as project accidents, governor Geraldo Alckmin said earlier this year.

The third highest budget percentage increase was the expansion of São Paulo's metro line No. 5 (purple), which jumped 176% to 6.9bn reais from 2.5bn.

Originally tendered and signed in 2010, it was scheduled for completion in June 2014. Setbacks included a court order halting construction over financial irregularities and a contract annulment in 2011. Completion is now expected in Decemberr 2016.

São Paulo line No. 5 train (CREDIT: CMSP).

São Paulo's metro line No. 15 (silver) has risen 160% to 6.4bn reais, while the budget for line No. 17 has grown 59% to 5.1bn reais. Completion of both is expected by end of 2016, representing delays of 12 months and 19 months, respectively.


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