Groups dispute contract to plan US$1.3bn Brazilian railway

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Tuesday, October 7, 2014

Two consortiums are disputing a contract to prepare a basic plan for the construction of the 750km Leste-Oeste (east-west) railroad budgeted at more than 3bn reais (US$1.25bn) in Brazil's Santa Catarina state.

Following a tender launched by federal rail company Valec earlier this year that attracted 11 bidders, the group submitting the best proposal was the Contécnica-Enefer-Topocart consortium, according to Valec tender documents.

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Judged on price as well as technical merit, the group beat the second placed bidder, consortium Prosul-Setepla-Urbaniza-Hansa. While the winner had 93.8 points and requested 54.9mn reais, the runner-up got 93.7 points and asked for 47.5mn reais.

The latter has filed an appeal that is being considered by authorities.

THE PROJECT

The Leste-Oeste railway is also known as the Ferrovia do Frango (chicken railway) due to the high volume of poultry that gets transported in the area. It will run approximately 750km between the coastal city of Itajaí and the town of Dionísio Cerqueira, which borders Argentina.

The company or consortium selected to carry out the consultancy will have 22 months to develop technical, financial, and environmental feasibility studies. The project falls under the federal government's growth acceleration plan, PAC.