“Among the immediate advantages are increased transport capacity, as well as reducing the emission of pollutants.”
If Brazil chooses to invest more money in their rail system, what types of benefits might they see? As reported by Felipe Montoro Jens, expert in Infrastructure Projects, several specialists participated in a rails study to explore this very topic, published by the Congress of Brazil and funded by the National Association of Rail Transporters ( ANTF) in partnership with OTM Editora.
According to subject experts, some benefits of investments in the railway sector would be: reduction of the emission of pollutants due to the migration of loads from the highway to the railroad; increased transport capacity, as the wagons conduct more cargo trucks; reducing congestion in cities; and, consequently, less accidents.
According to a study by Gesner Oliveira, a professor at the São Paulo School of Business Administration, maintained by the Foundation Getulio Vargas (EAESP / FGV), , and Fabiano Pompermeyer, the director of the Institute for Applied Economic Research (IPEA), despite so many benefits, the railways represent only 15 percent of the transport infrastructure in Brazil. This is a percentage that is considered low, Jens points out. The predominance is transport by road, which arrives at approximately 65 percent of the total.
More Rail Would Benefit Brazil Business
According to an expert comparison, an average grain wagon is capable of holding 100 tons of grain. A truck, in comparison, carries only 36 tons of grain. Still, Jens points out that Brazil has over 300,000 kilometers of highways, whereas there are only 29 thousand kilometers of railway.
Of these 29,000 kilometers, a total of 22 thousand were built with metric gauge, a method which is considered excessive and less reliable, as explained by experts in economy and business.
But why is there so much lack of investment in this sector? According to the experts attending the Congress of Brazil, the main factor that hinders the development of the rail system is the lack of continuity with project planning logistics in the country, explains Felipe Montoro Jens. The fact is that the construction of new railways is a long-term project, and the exchange of government in Brazil ends up harming that plan. Usually, this means the abandonment of old projects.
Long Term Planning is Needed
For Raymond Atkins, the former adviser to the Surface Transportation Board in the United States, the current 30-year term of the railways in Brazil is very short, which ultimately harms the development of the sector. “Planning for a railway is long-term, [lasting] 60, 70 years, ” Atkins explained.
It is worth noting, however, that expert estimates suggest that the gradual replacement of transport road for railway systems would create an estimated economy boost of 30 percent due to the greater load capacity of the trains. According to the same report, “The substitution would also entail a savings of R$ 15.8 million per year in expenses with [fewer] traffic accidents.”
How Does Felipe Montoro Jens See This Progressing?
In conclusion, Felipe Montoro Jens reinforces the issue of pollution. According to data and other examined material, road transport accounts for 95 percent of all carbon dioxide (CO2) gas emissions. The railway system, on the other hand, creates only 5 percent of pollution (at least for the time being).
For more insight into how Felipe sees business and private partnerships on Brazilian Infrastructure projects, check out his Ideamensch interview.
mais sobre nossas parcerias público-privadas: https://t.co/1vP43deD1b
— Felipe Montoro Jens (@felipemontoroj) March 21, 2018
Check out our previous article about Felipe here:
Felipe Montoro Jens is Called Into Action to Assess New PPP Deal in Rio de Janeiro