Executive Summary. ............................................................ 4 1. Overview of the Railway Market. ............................. 5 1.1 Brazils Transport System ......................................... 5 1.2 Historical Development ............................................ 7 1.3 Future Growth .......................................................... 8 1.4 Driving Forces in the Sectors Future Development. . 9 1.4.1 Network interconnection .................................... 9 1.4.2 Containerization of transport............................ 10 1.4.3 Domestic railway suppliers .............................. 10 1.4.4 Major sports events .......................................... 10 2. Railway Transport Policy in Brazil. ........................ 11 2.1 Legal and Regulatory Framework. ..........................11 2.2 Visions and Plans. ...................................................11 2.3 Financing Investments ............................................ 12 2.3.1 BNDES ........................................................... 12 2.4 Key Institutions and Industry Associations ............. 12 2.4.1 Ministry of Transports ..................................... 12 2.4.2 Ministry of Cities ............................................. 13 2.4.3 National Association of Rail Transporters ........ 13 2.4.4 National Public Transport Association ............. 14 2.4.5 Tourist Train Operators Association ................. 14 2.4.6 Railroad Industry Association .......................... 14 2.4.7 Rail and Road Materials and Equipment .......... 15 3. Railway Operators................................................... 16 3.1 ALL Amrica Latina Logstica. ............................... 16 3.1.1 General Information ........................................ 16 3.1.2 Business Focus and Market Strategy ................ 16 3.1.3 Business Development Capacities .................... 17 3.1.4 Traction ........................................................... 17 3.1.5 Safety and IT Systems ..................................... 17 3.1.6 Investment and Procurement ............................ 17 3.2 MRS. ...................................................................... 18 3.2.1 General Information ........................................ 18 3.2.2 Business Focus and Market Strategy ................ 18 3.2.3 Business Development Capacities .................... 18 3.2.4 Traction ........................................................... 18 3.2.5 Safety and IT Systems ......................................19 3.2.6 Investment and Procurement ............................19 3.3 Vale. ........................................................................19 3.3.1 General Information .........................................19 3.3.2 Business Focus and Market Strategy.................19 3.3.3 Business Development Capacities ....................20 3.3.4 Traction ............................................................20 3.3.5 Safety and IT Systems ......................................20 3.3.6 Investments / Procurement ...............................20 3.3.7 EFC Estrada de Ferro Carajs ...........................21 3.3.8 FNS Ferrovia Norte Sul ....................................21 3.3.9 EFVM Estrada de Ferro Vitria-Minas .............22 3.3.10 FCA Ferrovia Centro Atlntica ......................22 3.4 TLSA Transnordestina. ............................................23 3.4.1 General Information .........................................23 3.4.2 Business Focus and Market Strategy.................23 3.4.3 Investments / Procurement ...............................23 3.5 CPTM / Metr So Paulo. .......................................24 3.5.1 General Information .........................................24 3.5.2 Business Focus and Market Strategy.................24 3.5.3 Energy Supply, Transmission and Use ..............24 3.5.4 Safety and IT Systems ......................................24 3.5.5 Investments / Procurement ...............................25 3.6 CBTU Companhia Brasileira de Trens Urbanos ......25 3.6.1 Ownership / Decision-makers ...........................26 3.6.2 Business focus / Market strategy ......................26 3.6.3 Investments / Procurement ...............................26 3.7 Serra Verde Express. ...............................................26 4. High-Speed Train Project. .......................................28 4.1 Project Description. ................................................28 4.2 Decision-Making Process........................................29 4.3 Interested Consortia. ...............................................30 5. Railway Construction Business. ..............................31 5.1 Engineering and Construction Companies. .............31 5.2 Electric Installation Suppliers. ................................35 5.3 Passenger Information / Ticket Vending Systems. ....37 5.4 Fleet Management. .................................................37 Table of Contents.
Annex A Map of Brazils Railway Network Annex B Railway Network Expansion Annex C Scale of Brazils Biggest Cities Annex D Table of Planned Investments Annex E Table of Fleets of Electric Urban Trains Annex F Table of Tourist Trains Annex G Import of Rail Products by Tariff Code Annex H Technical Standards Annex I List of Abbreviations
4 | The Brazilian Market for Railway Technologies
Brazil is emerging as an attractive market for railway technologies. Having neglected its railway systems during the second half of the 20th century, the country now suffers from infrastructure bottle- necks (see Chapter 1). It has come to realize that railways offer the best solution for both freight transport over large distances and passenger transport in congested urban areas (see Chapter 2). The Football World Cup 2014 sets an effective deadline for imple- mentation of urban transport solutions. With shorter timelines and lower costs than subways, light rail systems and monorail projects are gaining ground.
The freight subsector was privatized in the late 1990s. The private concessionaires have consolidated their operations and increased their competitiveness. While the transport of commodities, espe- cially iron ore, still plays a predominant role, the railway operators business strategies are becoming more aggressive, with a focus on containerization and developing intermodal transport solutions (see Chapter 3).
Extensive new railway lines are under construction, like the North- South axis and the Transnordestina, and more are being planned by the government. The most spectacular project is the high-speed train between Rio de Janeiro and So Paulo / Campinas. In the latter case, the government has set tough conditions for a public- private partnership, and insists on technology transfer. A decision on this project is imminent (see Chapter 4).
The new projects have spurned a renaissance of the railway con- struction business, with Brazils major construction companies taking the lead (see Chapter 5). Most of the major rolling stock manufacturers are by now established in Brazil; some are expand- ing their production capacities in anticipation of rising demand (see Chapter 6). The re-emergence of a national rail industry has not affected the import of rail products in a negative way, and most import duties remain at 14% (see Chapter 7). However, domestic suppliers are privileged in public procurement and in projects financed by the national development bank, and the introduction of national technical standards may create some additional difficulties for foreign suppliers (see Chapter 8). In order to successfully sell rail products in Brazil, therefore, it is recommended to find a strong local partner.
Executive Summary.
The Brazilian Market for Railway Technologies | 5 1.1 Brazils Transport System Brazil is the fifth largest country in the world in terms of surface area, with more than 8.5 million km2. It is also number 5 in terms of population, with the majority of its 192 million people concen- trated in a 200 km belt along the coast, as well as in the more industrialized and urbanized South Eastern and Southern States (from Minas Gerais in the center down to Rio Grande do Sul on the border to Uruguay and Argentina).
From the early colonial days, land transportation has been a chal- lenge, given the countrys size and topography. Its economy was based and continues to rely on the export of mineral and agricul- tural commodities, which need to be shipped from inland to the industrial centres and ports. In recent years, it has been Asias insatiable demand for commodities that sustained Brazils econ- omy, putting the countrys transport infrastructure under severe stress.
More than half of all freight movements in Brazil, an estimated 58%, occur on the roads. The railroads share in the modal split is slowly increasing, but currently does not exceed 25% - experts suggest it may lie substantially below this official number. Other means of transport include waterways (13%), pipelines (3.6%) and air freight (0.4%). Rail transport in Brazil therefore holds a low market share by international standards, especially when com- pared to other countries of continental dimensions (see Table 1).
Table 1: Freight transport, modal split compared Rail Road Other Russia 81% 8% 11% India 48% 50% 2% Canada 46% 43% 11% USA 43% 32% 25% Australia 43% 53% 4% China 37% 50% 13% Brazil 25% 58% 17% Source: ANTT 2009
As the modal split demonstrates, Brazils transport system is far from allocating cargo to the optimal means of transport. The road is used for shipping mass cargo even over long distances, e.g. soy from Mato Grosso to the ocean ports (2000km). In Brazils largest seaport, Santos (near So Paulo), no less than 81% of cargo is delivered by road and just 12.7% by rail. In harvest times, trucks (and their drivers) queue for 36 hours or longer before they are allowed into the port.
It has come to be widely recognized that Brazils dependence on road transport threatens the countrys competitiveness and further development. Bottlenecks and traffic congestion appear not just in the big cities and in the vicinity of seaports, but also overland. According to estimates, transport inefficiencies force Brazilian companies to hold 21 days worth of extra stocks compared to their US competitors.
Brazils railway network (see Map in Annex A) is Latin Americas largest, but still considerably less dense than those of its global peers, with just 3.4 km / 1000 km2 (compared to 130 km for Ger- many, 21 km for India and the USA, 7 km for Canada and China). The networks structure corresponds to the spatial distribution of economic activities a century ago - indeed, roughly 80% of tracks were laid more than 100 years ago, and the biggest part is narrow gauge:
Table 2: Brazils railway network extension Km Narrow gauge (1m) 22.897 Broad gauge (1.6m) 5.069 Other 510 Total 28.476 Electrified 1.600 Source: ANTF
It should be noted, however, that of the 28.476 km of track officially registered, 9000 km of narrow gauge lines are not actually utilized, and 10.000 km receive no more than one train per day, according to the National Land Transport Agency ANTT. On the other hand, roughly 10.000 km of new railway lines are planned, of which half are under construction and should be completed by 2015 (see Annex B). This is the case of one stretch of the North-South axis (1480 km), the East-West axis crossing the State of Bahia (1490 km), and the Trans-Northeast railway (1728 km).
Despite of its large hydropower resources and generally green energy matrix, freight transport relies on diesel-electric traction. Electric traction (usually 3000 V) is and will probably remain limited to urban and suburban networks; the new high-speed line Rio de Janeiro So Paulo / Campinas may add another 511 km.
1. Overview of the Railway Market.
6 | The Brazilian Market for Railway Technologies
Efficiency and safety of railroad transport have greatly improved over the last decade, but are still hampered by the big number of level crossings (12.289 countrywide) and by irregular housing next to railway tracks. These problems contribute to slowing down the average speed of trains to just 25 km/h one of the worlds lowest.
Rail transport in Brazil means predominantly freight transport of mass cargo over long distances and urban passenger transport. In the freight category, more than 70% of transport production is concentrated on one type of cargo, iron ore, which is also by far Brazils most important export commodity.
Table 3: Cargo transported by Brazilian Railways (2007) RTK mio. Iron ore 189.251 Other Iron and Steel industry inputs 10.356 Cement 2.399 Cement industry inputs 2.008 Coal 4.099 Minerals 5.222 Soy 18.052 Other agricultural products 11.734 Fertilizers 4.786 Pulp / timber 1.154 Fuel 5.595 Containers 1.993 Other cargo 467 Total 257.117 Source: ANTT
As shown in Diagram 1, the total volume of cargo transported has steadily increased over the past decade:
Source: ANTF. Iron ore and coal are shown in orange, other cargo in blue. In the 1997-2007 period, cargo volume grew 4.9% annually on average. ANTF expects that the 10% decline in 2009 was more than made up by growth in 2010.
In the whole of Brazil, there are 34 companies licensed for rail passenger transport. The big players are the public transport providers in Brazils megacities So Paulo and Rio de Janeiro, which account for 86% of trains and 90% of passengers trans- ported nationally, as Table 4 shows:
Table 4: Urban passenger transport companies Company Train fleet Passengers / day CPTM (So Paulo) 377 1.554.000 Metr So Paulo 164 2.389.000 SuperVia (Rio) 180 457.000 Metr Rio 32 531.000 Others 116 543.000 Total 869 5.474.000 Source: Revista Ferroviria. Passenger average for August 2010.
See Annex E for a more detailed account of passenger transport fleets in Brazil.
Public transport has a market share of approximately 36% in Bra- zils bigger cities (above 1 million), ahead of pedestrian (33%) and car traffic (31% of all trips). For Rio de Janeiro, it is estimated that metropolitan trains and subways together account for just 7% of public transport, while buses and vans bear 89%. Clearly, there is a lot of room left for passenger transport on rails. Given the size of the two megacities So Paulo has 11 million citizens, plus 8 million people in the conurbation, Rio has over 6 plus 5 million and their frequent traffic jams, the extension of subway networks remains utterly inadequate: Rios subway lines are 41 km long, and So Paulos subway lines stretch 60 km. On the CPTM lines, slow passenger trains are eating away capacity (these will be eliminated upon completion of a rail beltway around the city).
The trouble is that subway line construction is costly (estimated at BRL 250 million = CHF 147 million / km in So Paulo) 1 and ad- vances too slowly to bring tangible benefits within an electoral cycle. Other modes of public transport, including bus rapid transit (BRT) corridors, tramway / light rail (called VLT in Brazil), elevated
1 The Real (BRL) is Brazils currency unit. An exchange rate of CHF 1.00 = BRL 1.7 is applied throughout this report.
The Brazilian Market for Railway Technologies | 7 train systems and monorails, or even ropeways (in Rio), are quicker and cheaper to implement and inaugurate.
For long-range passenger transport, Brazilians rely on coach and increasingly air travel. Intercity passenger trains once existed, including the overnight silver train which ran between So Paulo and Rio, but the service was scrapped in the late 1990s. A project for a high-speed train between the cities (and airports) of Rio de Janeiro, So Paulo, and Campinas has been discussed ever since (the current state of this project is discussed in Chapter 4 below).
If realized, the high-speed train may herald a new era of rail pas- senger transport in Brazil. Technical studies for new high-speed lines (stretching from So Paulo / Campinas towards Curitiba and Belo Horizonte) are under preparation, regional trains might be reintroduced on the Santos So Paulo Campinas line, and the feasibility of passenger traffic on some of the newly built railway lines (e.g North-South axis) will also be evaluated.
1.2 Historical Development Railroad construction in Brazil started in the mid 19 th century and was promoted by British companies. Their primary purpose was to transport agricultural commodities, e.g. coffee beans, from the plantations to the nearest ports. Urban tramways (called bondes) were introduced at the beginning of the 20 th century by a Canadian company.
By 1928, Brazil already had a network of 30.000 km of railways. At that stage, public investment was redirected at improving Brazils road system. This was prompted by a fundamental shift in eco- nomic policies: Instead of relying on the export of commodities (the price of which had fallen dramatically during the global depression of the 1930s), Brazilian governments now wanted to turn the coun- try into a self-sufficient industrial power. After World War II, the development of a national automobile industry was to play a cen- tral role in this design, and transport policy was shaped accord- ingly. The production of automobiles, coaches and lorries, and the construction of highways even in the most remote areas as in the case of the Transamaznica became associated with the notion of progress.
Railway operators, on the other hand, became aware that their concessions would not be extended for political reasons, and consequently reduced investments. The process of nationalization began in 1946, as the British-owned So Paulo Railways conces- sion expired. In 1957, the federal government created the Rede Ferroviria Federal (RFFSA), which was to run a total of 42 na- tionalized railway lines. The government of So Paulo created a similar state company, Fepasa, for 5 railway lines of its own. Public ownership of railways was seen as an expression of economic independence, but public investments in railway maintenance or expansion remained far below necessities, while tariffs were kept artificially low.
Picture 1: Construction of the Trans-Amazon highway (1972)
Source: Veja magazine
Throughout the 1960s and 1970s, Brazil recorded record growth rates (close to those achieved by China nowadays), accompanied by massive investments in infrastructure which were financed externally. With the second oil crisis in 1983, Brazils current ac- count deficit became unsustainable, and a debt crisis erupted. For two decades, Brazil was struggling to control hyperinflation and to bring public accounts back into balance, with very limited access to international capital. The rate of investments into transport infra- structure dropped from 2% of GDP (1975) to 0.3% of GDP (1993) and has remained low ever since.
Brazils railway network was in an extremely bad shape when the government decided, in 1997, to privatise the sector. The assets of the two State companies RFFSA and Fepasa, all but bankrupt, were split into several portions and offered in concession to private companies, namely Amrica Latina Logstica S.A. (ALL), MRS Logstica S.A., Vale (former Companhia Vale do Rio Doce), Ferrovia Centro-Atlntica S.A. (FCA), Ferrovia Tereza Cristina
8 | The Brazilian Market for Railway Technologies
S.A.(FTC) and Transnordestina (former Companhia Ferroviria do Nordeste). These are the major players in the Brazilian railway market nowadays (see Chapter 3).
Between 1997 and 2009, the investments done by these conces- sionaires amounted to a total of BRL 21 billion (CHF 12.3 billion). These resources were intended for the recovery of the rail net- work, the adoption of new technologies, the reduction of the num- ber of accidents, professional training, and the acquisition and reform of undercarriages.
Table 5: Investments by railway concessionaries 1997-2007 BRL million Rolling stock 8.770 Infrastructure 1.680 Superstructure 4.360 Telecommunication 220 Signalisation 410 Workshops 330 Other 1.930 Total 17.770 Source: ANTF
The results are tangible: Since privatisation, the volume of goods increased by 81%, container traffic has grown 75 times its original size, and the accident rate has fallen by around 80%.
RFFSA had also operated urban transport systems in Brazils major cities, through its erstwhile subsidiary, Companhia Brasileira de Trens Urbanos (CBTU). In 1993, the federal Ministry of Cities took over CBTU. While it continues (for the time being) to operate passenger trains in the cities of Recife, Belo Horizonte, Joo Pes- soa, Natal and Macei, the urban rail transport systems of the biggest cities Fortaleza, Salvador, So Paulo, and Rio were trans- ferred to the respective State governments since 1994. These systems are now operated by State-owned companies (e.g. So Paulos CPTM), mixed companies (e.g. Salvadors CTS) or by private concessionaries (e.g. Rios Supervia). In Rio Grande do Sul (with the city of Porto Alegre), the federal government owns 99% of the company Trensurb, which runs an urban passenger line and plans to construct a subway.
It was only in the 1970s that the State governments began invest- ing in metropolitan subways, but the pace of expansion remained rather slow. With traffic congestion ranking high on the political agenda, State and city politicians have recently raised budgets for subway investments substantially, and entered into public-private partnerships. The State of So Paulo, for instance, has an invest- ment budget of BRL 4.6 billion for metropolitan transports in 2011, and plans to prioritize train and subway expansion. Support from development banks (like Brazils BNDES, the Inter-American De- velopment Bank, and the World Bank) has also been forthcoming.
Picture 2: Subway construction in So Paulo
1.3 Future Growth Brazil today has a stable economy with GDP growth rates pro- jected at around 5% for 2011 and 2012. The country has ridden the global financial crisis rather well, thanks to sustained domestic demand and Asias hunger for raw materials (like iron ore and soy), which Brazil supplies in ever-growing numbers.
The rail sector is a beneficiary of the economys overall success, and feels the need to expand its capacities. According to informa- tion collected by the magazine Revista Ferroviria, railway pro- jects worth more than BRL 106 billion (CHF 62.4 billion) are cur- rently planned or under execution in Brazil, of which BRL 76 billion (CHF 44.7 billion) in the passenger segment, and BRL 30 billion (CHF 17.6 billion) in the freight segment (see detailed list of pro- jects in Annex D).
The National Transport Confederation (CNT) estimates that a total of 11.000 km of new tracks will be laid and nearly 5000 km will need to be refurbished. Some lines will have to be duplicated and bottlenecks eliminated. The introduction of dry ports and multi- modal logistic centres will also require substantial investments.
Important new railway concessions stretching a total of 9740 km were granted to Valec, a state-owned company controlled by the Ministry of Transports. By the end of 2010, Valec had already invested a total of BRL 3.4 billion for the construction of 909 km of new lines. Valecs concessions, shown in Map 1, are meant to integrate existing networks and provide new transport alternatives for farmers on the new frontiers of agricultural devepment.
For urban passenger transport, the Ministry of Cities projects that the existing metro networks will add 133.5 km to their existing networks (215.7 km) by 2022. Furthermore, the concession for a high-speed train linking the big metropolitan areas of Rio and So Paulo, over a distance of 511 km, is due to be awarded in April 2011.
The demand for rolling stock is set to increase dramatically over the decade, as Table 6 shows:
Table 6: Projected Rolling Stock demand, 2011-2020 units Locomotives 2.100 Freight cars 40.000 Passenger coaches 4.000 Source: Ministry of Transports, November 2010
The Brazilian rail industry estimates that there will be 100.000 wagon units and 3000 locomotives effectively operating in 2012. By setting up their own productive capacities in Brazil, big interna- tional players (like GE, Siemens, and Bombardier) show confi- dence in the mid- and long-term prospects of the Brazilian market.
1.4 Driving Forces in the Sectors Future Development. Apart from Brazils accumulated backlog of infrastructure projects, there are a few factors that will drive the development of railway transport in Brazil: 1.4.1 Network interconnection The planned integration railways notably the North-South, Cen- ter-West, West-East and Transnordestina axes will lend a new quality to Brazils railway network as a whole. Instead of just linking mines to their nearest seaports, railways will become useful for distribution of goods within Brazils domestic market. To get access to this network will become ever more attractive for industrial pro- duction centres. Furthermore, the creation of dry ports and multi- modal logistic platforms will help to overcome the shortages asso- ciated with the low density of the network.
10 | The Brazilian Market for Railway Technologies
1.4.2 Containerization of transport Container transport is the fastest-growing segment of the freight transport market, and thus a focus for many railways operators. Container traffic in the port of Santos (Latin Americas biggest) is expected to grow from approximately 3 to 10 mio. TEU by 2024, and a substantial part of this cargo will have to be transported on rails. 1.4.3 Domestic railway suppliers Brazilian transport policy has already been subordinated to indus- trial policy objectives (like the establishment of a national car in- dustry) in the past. The same mechanism will work in the favour of railroads in the future. The production of rail equipment offers an opportunity to add value to Brazils heavy industries, and the coun- try has also attracted significant foreign investments of rolling stock manufacturers. As they gain political influence, these industries will weigh in favour of a continuous expansion of railway networks and services. Brazil may adopt measures (like the lifting of tariff ex- emptions and local content requirements) to protect domestic railway suppliers, but niche players will always find interesting opportunities in a growing market. 1.4.4 Major sports events Brazil will host the 2014 FIFA World Cup and the 2016 Olympic Games. FIFA World Cup matches will be played in 12 cities: Belo Horizonte, Braslia, Cuiab, Curitiba, Fortaleza, Manaus, Natal, Porto Alegre, Recife, Rio de Janeiro, Salvador and So Paulo. Rio de Janeiro will host the Olympics in 2016.
The 12 host cities are committed to upgrade their public transport system (e.g. by connecting airports, city centres and stadia). Even though these events last no longer than a month, they serve as catalysts for lasting improvements in urban passenger transport. By setting a deadline which cannot be postponed, FIFA and the Olympic Committee are putting pressure on a number of invest- ment projects which might otherwise slip down in the order of political priorities. Brazilian politicians will have lots of reasons to deliver on schedule, since 2014 will be another election year.
The Brazilian Market for Railway Technologies | 11 2.1 Legal and Regulatory Framework. Brazils Constitution of 1988 allows for both direct operation of rail transport services by the State and for concessions to private companies.
Concessions have been granted since the 1990s for (renewable) periods of 30 years; they are administered by the National Land Transport Agency (ANTT). Maximum tariffs as well as production and safety targets are included in the concession. Concessionaries are responsible for both track maintenance and train operation.
The legal framework for concessions is currently under review by the Ministry of Transports and the ANTT. The declared objective is to maximize the use of infrastructure, by encouraging interopera- bility and regulating access to previously exclusive lines. Railway companies, on the other hand, advocate a simplification of their reporting obligations and of procedures to obtain environmental licenses.
A legal framework for public-private partnerships was established by federal law in 2004. It has been successfully tested in the case of So Paulos subway line 4 (ViaQuatro).
Some labour-related and environmental liabilities stemming from the extinct RFFSA still hang over the sector, leaving doubts on the eventual responsibility of private concessionaries and their Board of Directors.
2.2 Visions and Plans. As the 1990s were characterized by austerity and privatisation, the Brazilian federal government entered the 21 st century with little capacity to plan the development of the national transport system. It lacked experts, data and administrative capacity to deal with the manifold challenges posed by vigorous economic growth of the last decade. It was only in 2007 that the Ministry of Transports finally presented a long-term vision in the form of the National Plan of Logistics and Transport (PNLT), which had been elaborated jointly with other Ministries and the States of the Federation, based on regional macroeconomic projections for the period 2007-2025. It aims at guiding the investments made by the Ministry of Trans- ports, but also at helping the public and private sectors to plan their investments properly.
The PNLT calls for a fundamental shift in the modal split, with a stronger role for rail and water transport, taking into account their energy efficiency and productivity. By 2025, freight transport should be concentrated on the railways (35%), with road transport down to 30%. To achieve this, the plan projects the construction of at least 11.800 km of new railway lines.
The PNLT contains a (non-exhaustive) list of recommended in- vestments for all modes of land transport in Brazil, for both public and private agents. Table 7 shows the total of investments into the railway sector and their share in the total transport investments recommended for the respective period:
Table 7: Railway-related Investments in the PNLT Period BRL billion Share of total 2008-11 33.7 30.9% 2012-15 53.1 62.9% Post 2015 63.3 65.1% Total 150.1 51.6% Source: PNLT, 2007
These numbers express the governments in-principle preference for rail transport in the long run. In political reality, however, the government finds it hard to shift the focus of investments away from highways maintenance and expansion. In the second version of its Growth Acceleration Programme (PAC 2) a showcase for all public and private investments in the period 2011-2014 the government forecasted BRL 48.4 billion (CHF 28.5 billion) of in- vestments into road infrastructure and BRL 43.9 billion into rail- ways. The railways are thus expected to receive just 42% of total transport infrastructure investments in the near future. If realized, this would still represent a big leap forward.
The governments vision, as enshrined in PAC 2, is twofold: first, to expand the rail network in order to achieve the development of a modern and integrated railway system with high capacity and linking areas of agricultural and mineral production to ports, indus- tries and consumer markets. Second, to implement projects and studies of the high-speed trains in order to connect the principal urban centres of the country, improving mobility, comfort, time and safety.
2. Railway Transport Policy in Brazil.
12 | The Brazilian Market for Railway Technologies
2.3 Financing Investments When the Brazilian government decided to hand over the opera- tion of railways to private concessionaries, it did so primarily for financial reasons: the state-owned RFFSA, which managed the rail networks before the concession, had accumulated losses of BRL 2.2 billion between 1994 and 1997.
With privatization, freight railways turned into a source of govern- ment income: Since 1997, the Federal Government has collected from the private sector BRL 11.7 billion in fees for concessions, leases, and taxes. This amount of money ought to be reinvested in infrastructure improvements, but so far, the government spent just BRL 850 million on that purpose. The private concessionaries (members of ANTF) argue that they invested BRL 22.5 billion in the meantime, and BRL 2.86 billion in 2010.
Most railway operators do not generate enough profit to finance more than small-scale investments by themselves. They rely on resources from their parent companies, joint ventures with impor- tant customers (e.g. mining companies) and on credits from the National Development Bank (BNDES). With inflation running high and a low savings rate, real interest rates are expected to remain among the worlds highest in the years to come.
Urban passenger transport continues to be heavily subsidized, while fares are kept artificially low. In the case of CBTU, which runs rail transport systems in several Brazilian cities, operational income covers just 37% of operational expenses. Under these circumstances, investments are financed by the federal, state or municipal treasuries. The Ministry of Cities set up a special pro- gramme (Pr-Transporte) to co-fund projects for the host cities of the FIFA World Cup, while big cities successfully created PPP arrangements. Credits from the World Bank and from the Inter- American Development Bank (IADB) are also available. When financed by these lenders, projects need to be tendered interna- tionally.
2.3.1 BNDES Few infrastructure investments happen in Brazil without the sup- port of the National Economic and Social Development Bank (BNDES). Due to its privileged access to capital markets (with a government guarantee) and to substantial direct transfers from the Treasury, the BNDES is able to lend at preferential rates, and plays a crucial role in long-term funding of all Brazilian companies. It may also acquire shares through its subsidiary BNDES Partici- paes.
ALL, Brazils only publicly listed railway operator (where BNDES holds 10.6% of shares), depends to a large degree (73% of its BRL 3 billion investment plan for 2009-12) on BNDES credits.
In 2009 alone, BNDES disbursements amounted to a total of BRL 137 billion, of which BRL 27.2 billion went into transport infrastruc- ture projects. The rail transport mode accounted for disbursements of approximately BRL 8 billion.
Furthermore, the BNDES has been instrumental in structuring concessions and public-private partnerships (PPPs) for large in- vestment projects like the high-speed train or new metropolitan subway lines.
2.4 Key Institutions and Industry Associations 2.4.1 Ministry of Transports The Ministry of Transports oversees rail, road and water transport in Brazil. Minister Alfredo Nascimento, a former mayor of the city of Manaus and Senator for the State of Amazonas, has been in charge since 2007. He belongs to the small Partido da Repblica (centre-right).
Picture 3: Transport Minister Alfredo Nascimento
The Brazilian Market for Railway Technologies | 13
Ministry of Transports www.transportes.gov.br Language: port.
Concessions for railroads are granted by the National Land Trans- port Agency ANTT (Agncia Nacional de Transportes Terrestres), a subordinate body of the Ministry of Transports. ANTT acts in the regulation and supervision regarding transportation by means of road, rail and pipeline in Brazil.
ANTT also acts as an appellate body to which highly dependant customers (e.g. mining companies) may complain about cargo transport tariffs.
ANTT - National Land Transport Agency www.antt.gov.br Language: port.
The planning, construction, and maintenance of the federal gov- ernments transport infrastructure, including roads, railways and waterways, is assigned to the National Department of Transport Infrastructure within the Ministry of Transports. DNIT has 2700 staff and an annual budget of BRL 10 billion. In the railway sector, DNIT is mainly concerned with the planning of new railway lines (implemented by Valec), while concessionaries are responsible for maintenance of existing lines. It is also concerned with the elimina- tion of bottlenecks and with safety improvements (e.g. eliminating irregular level crossings). It is also involved in the establishment of technical standards and promotes research and training of railway engineers.
DNIT https://gestao.dnit.gov.br Language: port.
VALEC is a public-owned company under the supervision of the Ministry of Transports. Its activities involve not only the execution, administration and coordination of the infrastructure programmes that is has been entrusted with (especially the North-South Rail- road), but also the development of studies of infrastructure, the coordination of the high speed train project and also other activi- ties in the field of rail integration, storage and connection with other transports.
As a public company, VALEC hires engineering services, supplies, equipment and services through public tenders.
VALEC Engenharia, Construes e Ferrovias S.A. Executive president : Jos Francisco das Neves
Quadra 03 lote A Ed. Ncleo dos Transportes Salas 1208 a 1248 70040-902 Braslia DF Tel.: +55 61 2029-6460
VALEC Engineering & Construction of Railways www.valec.gov.br Language: port.
2.4.2 Ministry of Cities The Ministry regulates and oversees the administration of public passenger transport services (including tariff policies) in Brazil. It should be noted, however, that Brazil as a federative republic leaves many regulatory and financial competencies to the State governments and City Halls.
The Minister, Mr. Mrio Negroponte from the centre-right Partido Progressista (PP), takes office on January 1, 2011. He formerly served as Secretary of Transports in the city of Salvador.
2.4.3 ANTF - National Association of Rail Transporters ANTF, the National Association of Rail Transporters, is the repre- sentative body for the six companies that own 11 of the countrys 12 railway freight concessions: ALL, MRS Logstica, Vale, FCA, FTC and Transnordestina. On its strategic agenda, ANTF has issues like regulation, taxation, safety, inter-modality, and elimina- tion of bottlenecks. It is also setting up a common databank of suppliers.
14 | The Brazilian Market for Railway Technologies
National Association of Rail Transporters www.antf.org.br Language: port.
2.4.4 ANTP -National Public Transport Association With more than 300 private and public companies and institutions, ANTP brings together the major stakeholders regarding ground passenger transport in the country. It calls for a better integration of mobility into urban planning, giving priority to collective transport in terms of public investments and use of public space.
In 2001, ANTP created the Permanent Metro-rail Maintenance Self Help Group (Grupo Permanente de Auto-Ajuda na rea de Manuteno Metroferroviria, GPAA) to discuss technical issues and standards of the industry.
Associao Nacional de Transportes Pblicos President: Ailton Brasiliense Pires Superintendent: Marcos Pimentel Bicalho Alameda Santos n 1000 - 7 andar - conj. 71 01418-100 So Paulo SP Tel: 11 3371 2299
National Public Transport Association http://portal1.antp.net Language: port.
2.4.5 ABOTTC - Tourist Train Operators Association The sub-segment of tourist trains is organized in ABOTTC (Associao Brasileira das Operadoras de Trens Tursticos Culturais). 31 companies are operating this kind of trains in differ- ent Brazilian states. Many of these companies have a great social importance for the region or specific tourist places they attend. ABOTTC currently lobbies in Congress for its members right to use railroads maintained by freight operators, without assuming greater co-responsibility for maintenance.
Associao Brasileira das Operadoras de Trens Tursticos Culturais Rua Cosme Velho, 513 22241-090 Rio de Janeiro RJ Tel.: +55 21 2558-1329 (ext. 202) Fax: +55 21 2558-1329 (ext.200) E-mail: secretaria@abottc.com.br
Brazilian Association of Tourist Train Operators www.abottc.com.br Language: port.
2.4.6 Abifer - Railroad Industry Association Abifer gathers 45 national and foreign-owned manufacturers of locomotives, cars and other rolling stock and components, signal- ing and telecommunication systems, material for tracks, in addition to companies specializing in services of engineering, maintenance, refurbishing, adaptation and modernization of railway vehicles. Since 1977, the Association acts as a lobby to defend the interests of the Brazilian industry of railroad equipment, components and materials, e.g. by encouraging railway network expansion and the inclusion of railroad equipment acquisitions and maintenance in BNDES programmes. Abifer also stimulates the improvement of national railway technology by means of agreements or exchange programs with universities and research institutions.
Associao Brasileira da Indstria Ferroviria President: Vicente Abate (AmstedMaxion) Avenida Paulista, 1313 - 8 andar - conjunto 801 - 01311-923 - So Paulo - SP Tel. +55 11 3289.1667
The Brazilian Market for Railway Technologies | 15 Fax +55 11 3171.2286 E-mail: abifer@abifer.org.br
Brazilian Association of the Railroad Industry www.abifer.org.br Languages: port., engl.
2.4.7 Simefre - Rail and Road Materials and Equipment Representing manufacturers of materials and equipments for rail and road traffic (especially rolling stock, trailers and coach bodies, motorcycles) established in Brazil, Simefre gathers 64 members in its railway and subway chapter. The industry association is in- volved in the creation of technical standards and advocates pro- tective measures like raising Brazils import tariffs for rail equip- ment from currently 14% to 35%.
Sindicato Interestadual da Indstria de Materiais e Equipamentos Ferrovirios e Rodovirios President: Jos Antonio Fernandes Martins Av. Paulista, 1313 - 8 andar, cj. 801 01311-923 So Paulo SP Tel: (11) 3289-9166 Fax: (11) 3289-5823 E-mail: simefre@simefre.org.br
Interstate Industrial Association for Railway and Road Materials and Equipments www.simefre.org.br Language: port.
16 | The Brazilian Market for Railway Technologies
This Chapter presents the main characteristics of Brazils major railway operators, both private freight forwarders and public urban transport service operators. A few minor players have also been included to complete the picture.
Maps of the railway lines operated by the concessionaires can be found on the website www.transportes.gov.br/bit/inferro.htm
3.1 ALL Amrica Latina Logstica. 3.1.1 General Information ALL Amrica Latina Logstica S.A. is a private company listed on the Brazilian stock exchange. It emerged in 1997 from privatized parts of the former state-owned company RFFSA.
Mr. Paulo Baslio was appointed CEO in September 2010.
ALL Amrica Latina Logstica S.A. Rua Emilio Bertolini, 100 Vila Oficinas 82920-030 Curitiba PR Brazil Tel.: +55 41 2141 7555 www.all-logistica.com
Table 8: ALL Key Figures Network extension 21.300 km Network in Brazil 16.000 km Fleet: Locomotives 1070 Fleet: Freight cars 31.000 Employees 6000 Turnover (2009) BRL 2.6 billion Investments (2010) BRL 1 billion Transport production (2009) 39 billion RTK Average train speed 33.1 km/h Source: Valor econmico
3.1.2 Business Focus and Market Strategy ALL is Latin Americas largest rail logistics operator with a network stretching from the main ports on Brazils Southern coastline (San- tos, Paranagu, So Francisco do Sul and Rio Grande) well into the interior (states of Mato Grosso / Mato Grosso do Sul) and into Argentina.
Map 2: ALL Network
Source: ALL
Freight is heavily concentrated on agricultural commodities (like soy, sugar, pulp etc.), fertilizer and other chemicals, and fuel. Thanks to sustained demand for grain transport, ALL was less affected by the global crisis and managed to maintain growth in 2009.
ALLs strategy is to grow in transport capacity and cargo volume between 10% - 12% p.a. The company has also fixed a strategic objective to raise the percentage of industrial (as opposed to agri- cultural) customers from currently 36% to 50% of its turnover. Indeed, container traffic has recorded the strongest growth rates over the past few years. To further develop this business, ALL acquired the Standard transport company (BRL 130 million turn- over in 2010) and created a new business unit for this segment, Brado Logstica, in December 2010. Brado will operate container terminals and a dry port and plans to introduce Brazils first double- stack cars.
The logistics operations of ALL also include the management of stocks and warehouses, urban distribution and services in port terminals. In some cases, ALL operates trains owned by its cus- tomers. 3. Railway Operators.
The Brazilian Market for Railway Technologies | 17 3.1.3 Business Development Capacities The company has its own area specialized in logistics projects, responsible for the development and implementation of new busi- nesses in the industrial and agricultural commodities segments.
New projects are developed based on operational and commercial feasibility analyses, followed by a logistics design customized to suit the clients needs. The final steps are implementation and follow-up of the indicators suggested. Cases include pulp and paper, cement and refrigerated cargo. The company is open for the cooperation with specialized third companies.
3.1.4 Traction ALL runs diesel locomotives on the whole of its network. It has managed to reduce diesel consumption from 6.8 l / 1000 GTK (in 2000) down to 5.17 l in 2008.
The handling of refrigerated goods (meat and poultry) posed a special challenge. Instead of running diesel generators on trains, ALL now dispenses of such units and relies on cooling at terminals and special feeders located at strategic locations along the route.
3.1.5 Safety and IT Systems ALL runs a web-based railway operations system (Translogic), first introduced in 2002 and upgraded in 2007. It supports the companys planning processes, from the building of a train to the unloading of cargo, and gathers all the operational information..
The company has developed its own operational systems for use in its fleet. All locomotives are equipped with onboard computers including GPS and satellite data transmission. In 2009, the first 90 remote controls for traction distribution (called locotrol) were put into service.
Rail traffic is controlled from ALLs Operation Control Center at Curitiba. Train circulation control and network track management is supported by the ATW (ALL Track Warranty System), another in- house development.
For network maintenance, ALL collects and processes data from different sources, including fixed wheel and rail temperature detec- tors located at critical points of the network, in its Permanent Way Information System (SIV).
The company sells some of its safety and IT systems to Africa through its ALL Tecnologia unit. ALL has a corporate university that trains workers such as techni- cians, drivers and engineers.
3.1.6 Investment and Procurement Since privatization, the company has invested BRL 6.7 billion. Its investment plans total BRL 3 billion from 2009 2012.
ALL has obtained government licenses to construct network ex- tensions. It is investing BRL 760 million to lay tracks from Alto Araguaia to Rondonpolis (260 km). For this project, ALL imple- mented a factory for sleepers, a factory for tracks and a stone- cracking unit in the region, generating 30.000 jobs. The construc- tion initiated in May 2009 and will be finished by 2012.
It also partnered with important customers to increase the capacity on critical sections of its network. One customer, Rumo Logstica (part of a sugar and alcohol business group), has committed to invest BRL 535 million to upgrade the railway line from Bauru (inland from So Paulo) to the port of Santos and so create a sugar corridor for the transport of 9 million tons per year. Rumo Logstica will also acquire up to 79 locomotives (BRL 255 million) and 1108 freight cars (BRL 140 million) for operation between its terminals.
According to CEO Paulo Baslio, all projects implemented by ALL focus on at least one of three aspects: improve productivity on the existing network; adapt the process to be able to receive different types of cargo with a high potential that is currently not transported by rail; increase the existing market where they are already active (e.g. agribusiness).
Projects for 2011 include: Implementation of discharging areas in the ports of So Fran- cisco do Sul (SC) and Rio Grande (RS). Those intermodal ter- minals will have capacity of 120 wagons per day each; Access tracks to several agribusiness industries in Passo Fundo (RS), Camb (PR) and Ponta Grossa (PR); Construction of new terminals for liquid cargo (especially bio- diesel and ethanol) mainly in So Paulos countryside to in- crease capacity and make better use of the existing network;
18 | The Brazilian Market for Railway Technologies
adaptations and investment to be able to transport Usiminas steel rolls (usually transported by road). Similar operations are being executed for Gerdau and ArcelorMittal.
The company also wants to purchase 30 to 50 locomotives and enhance its fleet by about 1000 wagons, both new and refur- bished.
3.2 MRS. 3.2.1 General Information MRS Logstica is controlled by its main customers, with the big mining companies CSN, MBR, and Usiminas holding 19-20% each, and Vale holding 41.5%. The Board of Directors is controlled by these shareholders jointly. Mr. Eduardo Parente Menezes is the companys president.
MRS LOGISTICA S.A. Praia de Botafogo, 228 sala 1201E, ala B, Botafogo 22250-906 Rio de Janeiro RJ Tel.: +55 21 2559-4601 www.mrs.com.br
Table 9: MRS Key Figures Network extension 1.674 km Fleet: Locomotives 675 Fleet: freight cars 17.681 Employees 5.358 Turnover (2009) BRL 3.4 billion Investments 1997-2007 BRL 3.0 billion Transport production (2007) 52.6 billion RTK Average train speed 29.2km/h Network extension 1.674 km Source: Valor econmico
3.2.2 Business Focus and Market Strategy The company has been operating in the rail transport market since its creation in 1996. It operates a network connecting the states of Rio de Janeiro, Minas Gerais and So Paulo - a region that con- centrates approximately 54% of Brazils gross domestic product and where most of the largest industrial complexes are located. It has access to the ports of Rio de Janeiro, Itagua, and Santos.
The main focus of MRSs activities is on the rail transportation of general cargo, such as ores, finished steel products, cement, bauxite, agricultural products, green coke and containers, and in integrated logistics, which involves planning, multimodality and defined transit time.
Like ALL, MRS aims at gaining market share in container business to and from the port of Santos, at the expense of road transport. One move in this direction was a commercial partnership with Contrail, announced in 2010. Within five years, investments of over BRL 600 million will be used in the construction of terminals for capture and distribution of containers, in fleets of trucks and other assorted equipment. MRS will have the responsibility of investing in the increase of the fleet of locomotives and also in the production of rolling stock which allows up to two containers to be stacked. 3.2.3 Business Development Capacities The company offers a complete logistics operation. As one of the leading companies of the sector, MRS has highly qualified staff for all necessary activities and is open to any cooperation with other business partners. 3.2.4 Traction Except for a 9 km electrified rack railroad between the port of Santos and So Paulo, for which it has acquired seven Stadler locomotives (HE 4/4, 5000 kW, see Picture 4), MRS uses Diesel locomotives for its network.
Picture 4: Stadler Locomotive Sold To MRS
Source: Stadler
The Brazilian Market for Railway Technologies | 19
3.2.5 Safety and IT Systems MRS uses modern equipment with GPS for locating the trains in real time and defensive signaling, as well as detection of tracks with x-ray and ultrasound. Track geometry is continuously moni- tored with the most modern equipment in Brazil: MRS pioneered the purchase of 2 units of the Track Star rail grinders and track evaluation vehicles in 2002. It is capable to test and measure track parameters with full non-contact technology, in speeds up to 40 km / h. Track geometry and rail strength data combined with post processing software, to control the risks and introduce an inte- grated computer based planning for all key components of the permanent way.
The company is currently working at the monitoring of cargos the proposed new system supports the growth of volumes in need of advanced services. MRS is looking for a systemic solution that facilitates the tracking of various points of the process, from origin to destination.
3.2.6 Investment and Procurement MRS is investing BRL 130 million in new rack and pinion locomo- tives, in order to increase the moving capacity in the Santos moun- tains from 8 to 24 million tons per year.
MRS and metropolitan passenger transport company CPTM are currently working on the freight / passenger segregation of a 12 km stretch in So Paulo. The works are due to end in mid 2012, for a total cost of BRL 900 million. This project will greatly enhance MRSs capacity, especially for container transport.
MRS shall also have the responsibility of investing in the increase of the fleet of locomotives, as well as in the production of special locomotives, of the double-stack variety, which allows up to two containers to be stacked. MRS will be investing some BRL 330 million in business involving TIPS, i.e. Intermodal Transport Termi- nal of the Port of Santos (Terminal Intermodal do Porto de Santos TIPS in Portuguese) and cargo transport in the So Paulo met- ropolitan area.
3.3 Vale. 3.3.1 General Information Vale, the largest mining company in the world, operates a diversi- fied portfolio of logistics services, with more than 10.000 km of railroads in Brazil. The company (formerly known as CVRD) was privatized in the 1990s, but the State (through BNDES) remains a minority shareholder.
Mr. Roger Agnelli is Vales President; Mr. Eduardo Bartolomeo is Director for Logistics, Project Management and Sustainability.
Vale (Headquarters) Av. Graa Aranha 26 20.030-000 Rio de Janeiro - RJ Tel.: + 55 21 3814-4477 www.vale.com
3.3.2 Business Focus and Market Strategy Vales rail network covers 9 Brazilian states and passes through 400 cities. It serves not only Vales own operations but a whole range of clients in varied segments such as sugar, fertilizers, coal, steel, fuels, iron ore, cement, granite, cellulose as well as general cargo in containers.
As shown in Map 3, the company has four railroad concessions: Centro-Atlntica Railroad (FCA), Vitria-Minas Railroad (EFVM), Carajs Railroad (EFC) and the North-South Railroad (FNS). In addition, Vale has a 41.5% stake in MRS Logstica.
Although Vales core business is mining, the company has in- vested a considerable sum in their logistics business over the last few years: from 2004 to 2008 Vales investments amounted to US$ 5.15 billion and in 2010 the forecast is US$ 2.6 billion.
Vale also owns eight seaport terminals: a multi-modal terminal, five general cargo ports and two iron ore export terminals Ilha Guaba Terminal (TIG) and Sepetiba Port (CPBS), both in the state of Rio de Janeiro.
In addition to their cargo business, Vale also operates two passen- ger trains: in Vitria-Minas Railroad (EFVM) and in Carajs Rail- road (EFC).
20 | The Brazilian Market for Railway Technologies
Map 3: Vales Network
Orange: EFC / Dark Green: FNS / Purple: FCA / Green: EFVM / Blue: MRS / Yellow: ALL stretch with Vale right-of-way
3.3.3 Business Development Capacities While all Vale companies activities are coordinated from Rio de Janeiro, the different railroads have their own departments in charge of operations planning, engineering and development. The company is nevertheless open for the cooperation with specialized companies.
New logistics projects are developed based on operational and commercial feasibility analyses, followed by a logistics design customized according to the clients needs. The final steps are implementation and follow-up of the indicators suggested. Cases include pulp and paper, cement and refrigerated cargo.
3.3.4 Traction Vales railroads run diesel locomotives on the whole of its network. Hundreds of wagons are drawn simultaneously by four or five locomotives on its routes.
In 2009, Vale launched their Biofuel project, and the company is currently testing the use of a mixture of natural gas and diesel in their locomotives, with gas concentrations varying from 50% to 70%. The company estimates that in the near future the use of natural gas in the locomotives of EFVM and EFC Railroads will avoid emissions of 73 thousand tons of CO2 in the atmosphere annually.
3.3.5 Safety and IT Systems The logistics system of Vales railroads uses state-of-the-art tech- nology to ensure safe and productive operations, which are moni- tored by satellite (GPS).
In 2010, at the Center of Excellence in Logistics (CEL) in Vitria (State of Esprito Santo), Vale began trials on one of the worlds most advanced train simulator. Developed in partnership with the Polytechnic School of the University of So Paulo (USP), the tool was developed at a cost of BRL 2,5 million and realistically simu- lates Vales railroad lines in 3D technology. The simulator shall be used for driver training using technology developed in Brazil, in order to improve operational safety, make fuel savings and reduce wear and tear in locomotives and wagons.
The virtual reality simulator reproduces the rail lines of the Vitria- Minas (EFVM), Carajs (EFC), North-South (FNS) and Centro- Atlntica (FCA) railroads. The 3D image is able to show the trains behavior throughout a rail lines trajectory, in different weather conditions, such as sunny, foggy and rainy.
The simulator incorporates innovative features, including a reader of geo-referenced data (latitude and longitude) that identifies all topographical features along a rail line, such as sharp bends and surface irregularities. The simulator also takes into account, within a virtual reality environment, all of the trains characteristics, in- cluding braking efficiency and dynamic braking, train/wheel trac- tion, travel time, fuel consumption and safety procedures.
3.3.6 Investments / Procurement In order to ensure maximum operational safety and high productiv- ity for its customers, Vale invests in the maintenance and en- hancement of its assets and also in the acquisition of specialized locomotives and wagons for the transport of various products.
With the upturn of the iron ore market after the financial crisis of 2008, Vale began to duplicate 605 km of the Carajs Railroad with the construction of the rail outlet connecting the future mine of Serra Sul (PA) to the port of Ponta da Madeira (MA). The works are part of the plan of the company to enhance the logistic capac-
The Brazilian Market for Railway Technologies | 21 ity of its Northern network, in order to enable that system to in- crease its transportation capacity to 230 million tons per year, starting in 2014. Today EFC has a capacity of moving 130 million tons a year. The duplication of EFC corresponds to 85% of the extension of the railway, which has 892 km today and connects all 56 rail crossing yards. The new railway connecting Serra Sul to the port of Ponta da Madeira will be double track and about 104 km long. The total of investments in permanent track and the acquisi- tion of 5540 new wagons and 70 locomotives amount to BRL 6 billion.
For the FCA Railroad, Vale is currently working on the duplication and straightening of an 8.3 km stretch from the eastern part of Belo Horizonte until General Carneiro in Sabar, which will im- prove the safety of neighborhoods and turn rail traffic more effi- cient.
With the renovation of the railway signalling system of the Vitria Minas Railroad, totalling BRL 3,4 million, Vale expects to enhance the capacity from 100 to 120 million tons of iron ore per year.
Other ongoing projects include: the construction of a warehouse for grains in the North region (So Lus) with capacity of 45.000 tons; customization in tracks and wagons to allow transport of differ- ent types of cargo for new and existing clients, such as ethanol producers, steel rolls and sugar; the construction of a Centralized Grain Terminal and Corridor for Fertilizers and Grains in Araguari, Iguatama and Pirapora. The investment on this project includes the construction of terminals for grains and fertilizers, duplication of 16 discharge areas in the corridor, maintenance of 150 km of tracks, replacement of ma- chinery and rolling stock. improvements of the Port of Tubaro and the palletising plant that Vale is operating in Esprito Santo.
The variant Litornea Sul is a Vale project together with the State of Esprito Santo, connecting the Vitria Minas Railway to the Port of Ubu and reaching the town of Cachoeira de Itapemirim. It will be 165 km of railway to transport steel products, cellulose and limestone, among other products. The variant will total some BRL 770 million of investments, to be borne by Vale and the State Gov- ernment. The railway does not yet have a date for start of con- struction as it depends on the granting of the preliminary permit for the construction of the Ubu Steel Company (Companhia Siderr- gica de Ubu) that will guarantee the feasibility of the railway. We now take a closer look at the four railway companies under the roof of Vale
3.3.7 EFC Estrada de Ferro Carajs
Table 10: EFC Key Figures Network extension 892 km (broad gauge) Fleet: Locomotives 211 Fleet: freight cars 11.983 Employees 4.601 Turnover (2009) BRL 2.7 billion Investments 1997-2007 BRL 3.6 billion Transport production (2007) 83.3 billion RTK Average train speed 27.5 km/h Source: Valor econmico
EFC is considered to be one of the main Brazilian railroads, not only because of the volume of cargo transported, but also because it uses state-of-the-art technology in its operations, which makes it highly productive, efficient and safe. EFC connects the countryside of Par to the main port in the northeast region, the Terminal Por- turio de Ponta da Madeira (the Port Terminal of Ponta da Madeira - MA). Besides transporting Vales ore production in Carajs (PA), the railroad transports general cargo for third parties, such as: fuel, cast iron and grains (soybeans, bran, corn and rice).
EFC also is one of the most important means of passenger trans- portation in the North of Brazil. The EFC train operates in the same route as the cargo trains and transports 1300 people everyday connecting 23 cities in the states of Maranho and Par.
3.3.8 FNS Ferrovia Norte Sul
Table 11: FNS Key Figures Network extension 215 km (broad gauge) 520 km under construction Fleet: Locomotives n.a. Fleet: Freight cars n.a. Employees n.a. Turnover n.a. Investments 1997-2007 BRL 1.25 billion Transport production (2009) 1.6 billion RTK Average train speed 32.5 km/h Source: Valor econmico
22 | The Brazilian Market for Railway Technologies
Construction work on the North-South Railroad (FNS) was initiated in the 1987 by Valec, a public company reporting to the Ministry of Transport (see Chapter 2.4.1), and a first stretch was inaugurated in 1996.
FNS, a subsidiary of Vale, has a sub-concession to operate the 215 km line between Aailndia and Porto Franco in Maranho. FNSs freight volumes are still small, but rising steadily at a growth rate growth of around 20% per year is forecast. As the railroad extends further south and reaches more developed regions, it is expected that volumes will reach 12.6 billion RTK in 2015.
Picture 5: North-South Railroad Under Construction
Under President Lulas Growth Acceleration Programme (PAC), the further extension of the North-South Railroad has become a priority for Brazils transport infrastructure development. Construc- tion is on-going under the responsibility of Valec. According to Valec, when finished, it will stretch 3.100 km. The North-South axis will constitute the backbone of Brazils railway system, and create an important export corridor for commodities (grains, sugar, meat, fertilizers and fuel) and general freight.
3.3.9 EFVM Estrada de Ferro Vitria-Minas
Table 12: EFVM Key Figures Network extension 905 km Fleet: Locomotives 318 Fleet: freight cars 19.076 Employees 5.189 Turnover (2009) BRL 3.3 billion Investments 1997-2007 BRL 4.2 billion Transport production (2009) 57.9 billion RTK Average train speed 21.5 km/h Source: Valor econmico
An important asset to Vale, EFVM is strategic because it links the Southeast and Midwest, connecting railroads and ports. For years, millions of tons of various products have been passing through EFVMs 905 km and the destination of part of this cargo is the Port of Tubaro (ES).
EFVMs passenger train is the only long distance passenger train of Brazil. The journey is 664 km long and takes 13 hours from the city of Belo Horizonte, MG to Vitria, ES. In 2009, it transported 925.000 people in two trains that operate the route daily.
3.3.10 FCA Ferrovia Centro Atlntica
Table 13: FCA Key Figures Network extension 8.066 km Fleet: Locomotives 610 Fleet: freight cars 11.772 Employees 5.358 Turnover (2008) BRL 908 million Investments 1997-2007 BRL 2.5 billion Transport production (2007) 14.4 billion RTK Average train speed 21.2 km/h Source: Valor econmico
The Ferrovia Centro-Atlntica (FCA) is the main railway network connecting the Northeast, Southeast and Midwest regions of the country. More than 8000 km of railway network under FCAs re- sponsibility go through about 300 municipalities in seven Brazilian states (Minas Gerais, Esprito Santo, Rio de Janeiro, Sergipe, Gois, Bahia and So Paulo) and the Federal District. The main products transported are soy and soy flour, limestone steel, iron ore, phosphate, sugar, corn, mineral and chemical fertilizers.
The Brazilian Market for Railway Technologies | 23
3.4 TLSA Transnordestina. 3.4.1 General Information Transnordestina Logstica (TLSA) is controlled by the steel com- pany Companhia Siderrgica Nacional (CSN), which in turn is controlled by the Steinbruch family. The National Development Bank BNDES is also a major shareholder.
The companys President is Mr. Tufi Daher Filho.
Transnordestina Logstica S/A (TLSA) Av. Francisco S, 4829 Carlito Pamplona 60.310-002 Fortaleza - CE Tel.: 55 85 4008-2500 / 4008-2507 www.csn.com.br
Table 14: Transnordestina Key Figures Network extension 4207 km Fleet: Locomotives 126 Fleet: freight cars 2237 Employees 1724 Turnover 93 million Investments 1997-2007 BRL 470 million Transport production (2007) 963 million RTK Average train speed 16.7 km/h Source: Valor econmico
3.4.2 Business Focus and Market Strategy Transnordestina Logstica operates in the Northeast region of the country and integrates the states of Cear, Piau, Maranho, Rio Grande do Norte, Paraba, Pernambuco and Alagoas. This is traditionally Brazils poorest region, but it has recently shown the strongest growth.
On its age-old narrow-gauge routes, the Transnordestina carries an extensive range of products such as limestone, ores, cement, fuel, ethanol, sugar, soy oil and iron ore, among others.
3.4.3 Investments / Procurement A New Transnordestina Railway (broad gauge) is currently under construction. The new railway connects the deep water ports of Pecm (near Fortaleza) and Suape (near Recife) to the interior. The goal is to raise the regions competitiveness in agricultural and mineral production with modern logistics.
Map 4: Transnordestina Railways
Red: New Transnordestina Railway (under construction)
The New Transnordestina project has already received invest- ments of BRL 2.3 billion; the total cost is now estimated at BRL 5.42 billion (exceeding the original forercast by BRL 1 billion). It is financed by the BNDES and by regional development funds and banks.
The project includes the construction of 605 km of new railroad between Eliseu Martins (PI) and Salgueiro (PE), and the remodel- ing of 1123 km of existing tracks in the Misso Velha Pecm, and Salgueiro-Recife stretches.
The concessionaire expects that the East-West stretch Eliseu Martins Recife will be ready for use by October 2012, and the Northern stretch by 2013. Delays occurred when environmental licenses, expropriations, government funds, and cement supplies failed to come forward.
Transnordestina has outsourced parts of the planning, engineering and development activities.
24 | The Brazilian Market for Railway Technologies
With more than 11.300 workers and 1700 machines (some equip- ment was rented in China), the New Transnordestina Railway project is one of the largest construction projects of the country. In public tenders, lots have been awarded to the big Brazilian con- struction companies: Odebrecht (13 lots), Andrade Gutierrez (4), and Queiroz Galvo (3). Odebrecht, the construction company that is executing this project.
For the production of 3 million sleepers, a factory was set up at the city of Salgueiro.
3.5 CPTM / Metr So Paulo. 3.5.1 General Information Both suburban train operator CPTM and the subway of So Paulo, are owned by the State of So Paulo, and report to its Secretariat of Transports.
CPTM - Companhia Paulista de Trens Metropolitanos President: Srgio Avelleda Rua Boa Vista 185 Centro 01014-001 So Paulo SP Brazil Tel.: 55 11 0800 055 0121 www.cptm.sp.gov.br
Companhia do Metropolitano de So Paulo - Metr President: Jos Jorge Fagali Rua Boa Vista 175 Braz 01014-001 So Paulo SP Brazil Tel.: 55 11 3291-7800 www.metro.sp.gov.br
Table 15: CPTM / Metr SP Key Figures CPTM Metr SP Network extension 260,8 km 69 km Number of stations 89 58 Fleet: Locomotives 119 - Fleet: Passenger cars 869 828 Employees (2009) 6.720 8.278 Turnover BRL 1.22 billion BRL 2.84 billion Investments 2007 - 2010 BRL 4.74 billion BRL 9,9 billion Passengers/ day 2.2 million 3.7 million Source: CPTM / Metr So Paulo
3.5.2 Business Focus and Market Strategy The CPTM metropolitan train network and Metr So Paulo serve a total of 39 municipalities that make up the metropolitan area of So Paulo, with a total population of 19 million. CPTM is in charge of transporting passengers to the heart of the metropolitan area of So Paulo, while the subway (Metr) distributes the passengers in the central area of the city.
Their strategy and business development plans comprise the investment of more than BRL 7 billion, for the expansion of lines, signalling and communications, safety systems, construction and renovation of stations, as well as for enhancing and refurbishing the fleet.
3.5.3 Energy Supply, Transmission and Use Electric energy is supplied by the public utilities, according to the needs up to 38,5 kV of AC to substations, where it is transformed. CPTM uses 3 KV DC for the overhead contact line and except for the newest trains of CPTM all of them use DC motors.
The same principle applies to the Metr, where the rectifier substa- tions transform the current to 380/220 V, to feed the equipment, and also make kneeling/rectification to power the trains pull in 750 V. Only the newest trains (line 5 and partly line 2) have AC mo- tors, all the others use DC. To move the trains, the electric cur- rent is sent to the third rail and is collected by shoes located on the sides of trains.
3.5.4 Safety and IT Systems Any movement of trains on the lines and yards, signalling systems and auxiliary energy distribution function under the command of the Operational Control Center (OCC). It has a Signalling and Traffic Control and Automatic Protection System for Trains, which governs the regularity of the interval between trips, speed control and maintenance of the distance between the trains. Electrical systems, communication and signalling work in a redundant way, i.e. if there are flaws in the main, the second is immediately fired.
The Brazilian Market for Railway Technologies | 25 The whole system needs daily corrective and preventive mainte- nance.
Both public CPTM and Metr SP are modernizing their systems intensively, thereby relying heavily on private suppliers. An exam- ple is the yellow subway line (line 4), inaugurated in May 2010, where all train functions are controlled directly from the Opera- tional Control Center.
CCR ViaQuatro the private concessionaire (majority stakeholder, first PPP in Brazil) that will operate and maintain the Yellow Line for the next 30 years commissioned a consortium of Siemens and Rotem to supply the metro cars, the signalling system, and the complete automation of Line 4. The same companies were also involved in equipping the Operational Control Center (OCC). At the OCC, controllers set up the route plans for each train and monitor the operations with a first class video wall. This is crucial to help track the movement in stations, on trains, across the line exten- sion, the maintenance yard, etc.
3.5.5 Investments / Procurement Both operators strive to improve the services offered and are ac- tive in the revitalization of their entire infrastructure. Since they are public companies, CPTM and Metr So Paulo will publicly tender all products and services they require.
The State of So Paulo has an investment budget of BRL 4.6 billion for metropolitan transports in 2011, and wants to prioritize train and subway expansion. The FIFA World Cup 2014 should ensure that the pace of investments remains high.
CPTM is expected to increase its capacity to 3.2 million passen- gers / day, and improve substantially the quality of its services.
Metr So Paulo is constantly expanding its network and fleet. Projects already under execution will bring So Paulos subway to an extension of 84.8 km.
Furthermore, a consortium formed by the construction companies Queiroz Galvo and OAS, plus Bombardier, has been awarded a tender worth BRL 2.5 billion for a project comprising production, supply and implementation of a monorail system. The Tiradentes Express will have an extension of 23.8 km and 54 electric traction trains. For the construction of 17 stations, another contract worth BRL 1.5 billion will have to be tendered. The project shall be con- cluded in 2013 and should reduce travel time from 2 hours to 50 minutes.
Another project is the MBoi Mirim Monorail of 34 km of suspended stretches connecting the poor neighborhoods of Jardim ngela and Vila Snia. The project totals BRL 3.4 billion, BRL 1.7 billion of which will be rolling stock. The tender is expected in the begin- ning of 2011, the first part will be borne by the City of So Paulo and the second by a PPP. The project is due to be completed before the FIFA World Cup of 2014.
Picture 6: Future Tiradentes Express in So Paulo
The construction of an Airport Express (linking Guarulhos Interna- tional Airport to the city centre non-stop), partly on existing tracks, was estimated by CPTM at USD 492 million, but the concession has not been successfully tendered yet.
3.6 CBTU Companhia Brasileira de Trens Urbanos Companhia Brasileira de Trens Urbanos Estrada Velha da Tijuca, n 77 Usina 20531-080 Rio de Janeiro RJ Tel.: +55 21 2575 3399 www.cbtu.gov.br dir.p@cbtu.gov.br
26 | The Brazilian Market for Railway Technologies
3.6.1 Ownership / Decision-makers CBTU is a semi-public company, with 99.9% of shares owned by the Union, under the supervision of the Ministry of the Cities.
The company has a central administrative office in Rio de Janeiro, five regional superintendences (Recife, Belo Horizonte, Natal, Joo Pessoa and Macei) and three regional offices (So Paulo, Salvador and Fortaleza).
Mr. Elionaldo Maurcio Magalhes Moraes is CBTUs CEO since September 2007. A lawyer, he has held several positions in the public sector, including 3 mandates as a state deputy for Alagoas.
3.6.2 Business focus / Market strategy
CBTU is focused on urban passenger transport. It used to operate urban and suburban train networks in all of Brazils major cities. The networks of So Paulo, Rio, Salvador and Fortaleza were subsequently transferred to the respective States, but CBTU con- tinues to run the subways in Recife and Belo Horizonte and urban trains in Macei, Natal and Joo Pessoa.
Given its experience in urban passenger transport, CBTU has been mandated by the Federal Government and other public insti- tutions to elaborate viability studies and engineering projects. It acts as the federal governments representative for accompanying subway construction works in Salvador and Fortaleza, and pio- neers the introduction of light rail systems (veculos leves sobre trilhos VLT) in Brazil.
3.6.3 Investments / Procurement Of CBTUs 215.3 km of track, just 66 km are electrified. One of Recifes two lines, and all urban trains in Macei, Joo Pessoa and Natal still use diesel-electric traction. CBTU plans to modernize public transport in these cities. In Macei and Recife, the imple- mentation of light rail systems has already begun; Joo Pessoa and Natal will follow. In 2010, CBTU purchased a group of VLTs from CAF.
Apart from line extensions, CBTUs project pipeline includes the modernization and purchase of new trains in the urban train sys- tem of Recife, the renovation of the signalling in urban train system of Belo Horizonte, and repairs in the urban train systems of Natal and Joo Pessoa. CBTU has recently substituted the entire ticket vending system.
Mr. Oswaldo Moss, General Manager of CBTU, said that the com- pany is always seeking new system segments, such as: rolling stock new technologies, information systems, electrification sys- tems, etc. The priority for new acquisitions is replacing old locomo- tives from the 1950s and 1960s that are still operating in CBTUs diesel powered units.
Companies interested in supplying CBTU need to be registered in CBTUs procurement system. On their website (home > licitaes) a complete list of documents for registration can be found. It di- vides interested companies in 5 categories: Miscellaneous service providers, installing companies, construction companies, consul- tancies and material suppliers.
3.7 Serra Verde Express. Serra Verde Express is controlled by Higi Serv, a family company. Adonai Arruda Filho is the responsible of the firm.
Serra Verde Express is acting as a tourism train operator in three Federal States. Headquartered in Curitiba, Paran, Esprito Santo and Mato Grosso do Sul are the other two states of business activity. The company banks on the development of tourism and is convinced of the Brazilian potential. It has an alliance with tour operator Transnico International of Belgium.
Serra Verde Express runs Diesel-electric locomotives rented from ALL in Paran and Mato Grosso do Sul, from FCA in Esprito Santo. It owns one Litorina, a self-powered railcar, operating as luxury train in Paran.
Since most equipment is rented from freight companies (conces- sionaries of the tracks on which Serra Verde operates), the com- pany has only limited technical capacities. Safety and IT systems, for instance, are under the responsibility of the freight companies.
The sub-segment of tourist trains, most of which operate outside the big cities, may nevertheless be a niche market for Swiss com- panies. Please refer to Annex F for a comprehensive list of Brazils tourist trains.
Picture 7: Serra Verde Express Train in Paran, Southern Brazil
.
28 | The Brazilian Market for Railway Technologies
Map 5: Projected TAV Line Campinas So Paulo Rio de Janeiro
The Brazilian government plans a high-speed train in Brazil called trem de alta velocidade (TAV) to link the cities of Campinas, So Paulo and Rio de Janeiro. With a projected total track length of 510.8 km, the investment volume is estimated at BRL 33.1 billion (CHF 19.5 billion).
For this project, the Brazilian government aims at attracting international capital and technical expertise, as well as man- agement capacity and innovation from the private sector. It has therefore adopted the model of a public service concession.
The concession will be granted to the successful bidder for 40 years, and the consortium responsible for designing, construct- ing, operating and maintaining the HST will have to transfer the necessary technology to Brazil.
The governments expects, perhaps somewhat optimistically, a construction time of no more than 6 years. According to ANTT, it should be ready in time for the 2016 Olympic Games in Rio de Janeiro.
4.1 Project Description. The economic and geographical situation in Rio de Janeiro and So Paulo two mega cities just 400 km apart is considered a classic case for high-speed trains, comparable to one of most successful railways in the world, which connects Tokyo to Osaka, in Japan.
Apart from the two cities, the TAV would also link three of the countrys main airports and several smaller cities (see Map 5).
The construction of the TAV will contribute to solving bottle- necks in passenger transport between Rio de Janeiro and So Paulo. Currently, the big number of shuttle flights connecting the two megacities (71 connections per day) are a major factor of airport traffic congestion, and the Presidente Dutra highway, which connects the two cities, operates at maximum capacity. There is currently no passenger train service between Rio and So Paulo.
The total cost of the project has been estimated at BRL 33.1 billion. The high-speed train is initially estimated to transport 32 million passengers per year and generate a total revenue of over BRL 2 billion (CHF 1.18 billion) per year.
4. High-Speed Train Project.
The Brazilian Market for Railway Technologies | 29 Taking into consideration an exchange rate of BRL 1.70 per US dollar, the costs total USD 35.36 million per kilometre, which is within the margin of average global costs practiced in this type of venture. ( According to reference studies conducted by the government, the average cost of high-speed train projects worldwide is USD 32.7 million per km.) The rugged and partly mountainous terrain of the region requires more investments than those in lowland areas, justifying the higher estimate.
Table 18: High-speed train technical parameters Parameter Value Gauge 1.435 mm Maximum train speed 350 km/h Maximum inclination (gradient) 3.5% Minimum horizontal radius 7.228 m Minimum vertical radius 42.875 m Cargo per train loading axis 17 t Minimum station platform 500 m Track length 510.8 km Tunnels 90.9 km Bridges 107 Source: Ministry of Transports
The entire technical studies concerning demand, alignment, geology, operation and economic-financial modeling are avail- able at:
4.2 Decision-Making Process. The idea of a TAV has been pondered and studied for decades. In 2008, the Inter-American Development Bank (IDB) commis- sioned Halcrow Group Ltd and Sinergia Estudos e Projetos Ltda. to prepare a new feasibility study, which was completed in June 2009.
The project is planned to be executed under the public private partnership model. The public tender of the concession had to be postponed in November 2010 as several interested consortia expressed that they were not able to comply with the conditions established by the Brazilian government. While the bargaining continues, the tender is now scheduled for April 2011.
The TAV is part of the Growth Acceleration Programme (PAC). Brazils new President, Dilma Rousseff, was responsible for the PAC before she ran for President and seems to be committed to implement the project.
The Brazilian government shall participate with about 30% of the equity capital of a new firm to be set up to build and admin- istrate the TAV in Brazil. Of a total of BRL 10.4 billion, about BRL 7 billion shall be funded by private investors and BRL 3.4 billion by the National Treasury.
A credit of more than BRL 20 billion from the national develop- ment bank BNDES will be available. Funding of the BNDES credit will be granted in full with the cost of long-term interest rate (TJLP - currently at 6% per year) plus a credit risk fee of 1% per year, for whichever consortium wins the bid. The pay- ment term will be 30 years, with a six-month grace period after the date scheduled to begin commercial operations. Interest will be capitalized during the grace period. Interest payments will be subsidized by the government in case the demand remains below the expected levels in the first 10 years of operation.
The credit granted by BNDES may be less than the sum men- tioned above, since the main criterion for choosing a successful bidder shall be the least public financing possible, the second most important criterion shall be the lowest ticket price charged from the final consumer. The maximum fare established in the bidding documents is BRL 0.49 per kilometres, in the economic class, with or without stopovers between the cities of Rio de Janeiro and So Paulo.
Technology transfer is expected from any of the consortia that are participating in the bidding process. Before elected, the new president of the Republic, Dilma Rousseff said that the ex- change between companies with high-speed train technology and Brazil is essential for the success of the project. We are not getting this high speed train just to keep on importing tech- nology and equipment from the producing countries for ever.
30 | The Brazilian Market for Railway Technologies
We are doing this within an integrated vision of transfer of tech- nology.
If Brazil effectively succeeds to build its own technological ca- pacity for high-speed trains, chances are that the government will promote more TAV projects (i.e. extending the network from Campinas to the cities of Belo Horizonte, Brasilia and Curitiba).
4.3 Interested Consortia. The implementation and operation of the TAV are capital- intensive, in addition to relying on technology and specific know-how held by a limited number of manufacturers and for- eign operators. Seven consortia expressed an interest to par- ticipate in the bid for tender so far: 1) Chinese consortium, led by the state companies China Rail Construction Company (CRCC), China North Railway (CNR) and China Investment Corpora- tion; 2) Korean consortium, led by state operator Korail and manufacturer Rotem / Hyundai; 3) Japanese consortium, led by Mitsui, Mitsubishi, Ka- wasaki and Toshiba; 4) Spanish consortium, led by CAF; 5) French consortium, led by Alstom; 6) German consortium, led by Siemens; and 7) Italian consortium, led by the public Ferrovie dello Stato and Ansaldo Breda.
Most of the consortia have not disclosed the names of their Brazilian partners (e.g. construction companies) yet. Some if not all consortia count on financial support from public institu- tions in their home countries.
As stated above, in the bidding process, some consortia have publicly raised questions regarding the projects feasibility. Even the Chinese consortium said that the tender conditions were difficult to accept, because the investment would probably ex- ceed BRL 33.1 billion and the volume of traffic was not predict- able. It also requested additional geological data, and argued that the clauses for the solution of situations of litigation were outside Brazil.
The Brazilian Market for Railway Technologies | 31 As discussed in Chapter 1.3 and shown in Annex X, Brazilian rail operators are planning and executing important investments to expand their capacities. This Chapter deals with the railway construction business and the major players involved.
5.1 Engineering and Construction Companies. Among the engineering and construction companies, the most important players are Camargo Corra, Odebrecht, Andrade Gutierrez and Mendes Jnior. These companies are partnering with large rail companies like Alstom and Bombardier for go- vernmental projects.
The companies listed below regularly participate in consortia and are thus potential clients for Swiss suppliers.
ANDRADE GUTIERREZ Rua Dr. Geraldo Campos Moreira, 375 04571-020 So Paulo, SP Tel.: +55 11 5502-2000 www.andradegutierrez.com.br
Andrade Gutierrez Group was founded in 1948 in Belo Hori- zonte (MG), and is one of the largest private groups in Latin America, with operations in Engineering and Construction, Telecommunications, Power and Public Bids.
In November 2010, the Andrade Gutierrez / Barbosa Mello / Serveng consortia won the bidding to execute Lot 4 from Ria- cho da Barroca to Rio de Contas. The lot is 178.3 km from the first stretch of Ferrovia de Integrao Oeste-Leste (FIOL), to Ilhus and Barreiras, Bahia. This deployment is coordinated by Valec. The value of the contract is BRL 739 million (CHF 434.8 million) and is valid for 24 months.
CAMARGO CORRA Rua Funchal, 160 Vila Olmpia 04551-903 So Paulo, SP Tel.: +55 11 3841-5511 www.camargocorrea.com.br
Camargo Corra is one of the largest parent companies in Brazil, originally founded as a small company in 1939. Today, the company employs over 30.000 workers and operates in the areas of engineering and construction, cement, footwear, steel, environmental engineering, textiles, energy, and highway bids. In 2009, according to Brazilian Chamber of Construction Indus- try (Cmara Brasileira da Indstria da Construo - CBIC), Camargo Corra was the second largest construction company in Brazil.
Camargo Corra is one of the companies working in Norte-Sul Railway construction, in So Paulo. The company also con- structed a new railway, EF JURITI, in the state of Par and has operations in Metr SP (Lines 2 and 4), Metrfor and Metr Salvador.
CARIOCA CHRISTIANI-NIELSEN ENGENHARIA Rua do Parque, 31 So Cristvo 20940-050 Rio de Janeiro, RJ Tel.: +55 21 3891-2200 www.cariocaengenharia.com.br
The company was founded in 1947 and its main areas of opera- tion cover ports and maritime terminals, dams, highways, bridges and viaducts, subways transportation, pipelines, sub- marine outfalls, buildings, sanitation and urbanization projects. Carioca also operates in the areas of real estate and public service bids. The company has worked in Metr Rio projects.
CETENCO ENGENHARIA S.A. Rua Maria Paula 36 - 8 Andar Bela Vista 01319-000 So Paulo, SP Tel.: +55 11 3320-7000 www.cetenco.com.br
Providing services in the construction area since the 1930s in both Brazil and abroad, Cetenco Engenharia S.A. has expe- rience in several engineering areas. The company constructs dams, locks and hydroelectric power plants, bridges and via- ducts, tunnels, highways, railroads, airports, ports, transmission lines, substations and other complex projects. The company 5. Railway Construction Business.
32 | The Brazilian Market for Railway Technologies
has also operated in the So Paulo and Rio de Janeiro sub- ways.
CONSTRAN Av. Juscelino Kubitscheck, 1830 Itaim Bibi 04543-000 So Paulo, SP Tel.: +55 11 5545-2620 www.constran.com.br
Founded in 1957, Constran operates in several civil construc- tion areas. The company is present in the construction of the most important public and private projects, such as: power plants and dams, subways and railways, ports, canals, river rectification and deepening of river chutes, airports, roads, bridges and viaducts, urban road systems, construction, sanita- tion, piping and transmission lines. The company has worked for Metr SP and Ferronorte.
CR ALMEIDA Av. Vicente Machado, 1789 Batel 80440-020 Curitiba, PR Tel.: +55 41 3312-9200 www.cralmeida.com.br The company was founded in 1952 and is one of the largest heavy construction companies in the country. Its portfolio in- cludes projects such as Paran Central Railroad and the North- South Railroad among many others. The company worked for the Central do Panar Railway, Ponta da Madeira (Carajs Railway), Metr Braslia and Metr Rio, Porto Alegre Metropoli- tan train and Norte-Sul Railway.
ENGEVIX Alameda Araguaia, 3571 Centro Empresarial Tambor 06455-000 Barueri, SP Tel.: +55 11 2106-0100 www.engevix.com.br Engevix has more than 40 years of experience in engineering consultation in Brazil and around 2630 employees in addition to permanent offices in five Brazilian states and three different countries (Mexico, Peru and Angola). The companys activities include the preparation of projects and integration and management of enterprises in the fields of energy, industry and infrastructure. It renders services in the elaboration of engi- neering studies, projects, project management and EPC (Engi- neering Procurement Construction). Engevix operates in the public and private sectors, such as: power (generation, trans- mission and distribution), oil & gas, petrochemical, pulp & pa- per, steel, mining, as well as infrastructure for railways, road- ways, subways, ports, airports and basic sanitation.
Engevix Group has a department that is specialized in railroad project elaboration and railroad work supervision.
Regarding the new projects ahead, Engevix is working in coop- eration with Valec on a project concerning the continuation of the North-South Railroad. They are still waiting for the results of 4 of 7 projects for metropolitan metros
Engevixs executive Mr. Wilson Vieira stressed that Engevix does not represent a potential client for the Swiss companies, but indicated other potential contractors in charge of rail equip- ment services: Camargo Corra, Odebrecht, Andrade Gutierrez and Mendes Jnior. According to Mr. Viera, these companies are partnering with large rail companies like Alstom for govern- mental projects. These types of partnerships may involve many companies and a lot of auxiliary supplier partners.
FERREIRA GUEDES Alameda Santos, 2441 - 6andar, conj. 62 01419-002 So Paulo, SP Tel.: +55 11 3087-8787 www.ferreiraguedes.com.br
Ferreira Guedes is an engineering services company that was founded in 1936 and has projects in railroads, highways, infra- structure, urbanization and sanitation, irrigation and building sectors. The company participates in projects such as Ferrovia do Ao and Projeto Carajs. The first project passes through the states of Minas Gerais and Rio de Janeiro. The second project is operated by Vale and connects Serra dos Carajs, in the state of Par, to Porto de Itaqui, in the state of Maranho.
The company helped construct 2666 km of railroads, remodel 265 km of railroad, maintain 1277 km of railroad, open 20 m of tunnels and build 2632 km of bridges and viaducts for the rail- way segment. Some of Ferreira Guedes clients are CPTM, CBTU So Paulo and CBTU Rio de Janeiro.
The Brazilian Market for Railway Technologies | 33
GALVO ENGENHARIA Rua Gomes de Carvalho, 1510, 19 andar Vila Olmpia 04547-005 So Paulo, SP Tel.: +55 11 2199-0222 www.galvao.com
Galvo Engenharia was established in 1996 in the city of So Paulo. The company provides engineering and construction services such as oil and gas pipelines, industrial assembly, buildings, road, airport, railway and urban infrastructure, hydro- power and dams, basic sanitation and industrial construction. It has participated in CPTM and Metr SP projects.
The company is in the process of starting a construction project for the Ministry of Transport (Ministrio dos Transportes)/ Valec to construct 117,9 km of the Railway Ferrovia de Integrao Oeste-Leste (FIOL), passing through the city of Jequi.
GRUPO MPE Rua So Francisco Xavier, 603 Maracan 20550-011 Rio de Janeiro, RJ Tel.: +55 21 3526-3541 www.grupompe.com.br
MPE was created to combine different engineering companies. These companies are MPE Participao em Engenharia e Servios S/A and MPE Participao em Agronegcios S/A.The groups main activities are the management of inte- grated enterprises, EPCs projects, civil construction and elec- tromechanical projects, the provision of maintenance services, commissioning projects and the operation of industrial plants belonging to the company itself or third parties.
MPE Montagens e Projetos Especiais S/A is part of the engi- neering division and has obtained agreements with operating companies in the railway segment with Metr SP, CPTM SP, Metr Rio, Riotrilhos, Metr Salvador, CBTU, RFFSA and Tren- surb/RS, among others.
The Transport Group, which is a division of MPE Montagens e Projetos Especiais S/A, works with Brazilian operators develop- ing projects, deployment and modernization of rolling stock (rails, locomotives, cars and maintenance vehicles), signalling systems, energy systems, telecommunication systems, ventila- tion systems, ticket-selling systems, management systems, command and database control.
The company is in a consortia with two Spanish companies, Dimetronic and Infoglobal, and has signed a contract to mod- ernize rails and systems of CPTM in So Paulo. The contracts will eventually provide modern control systems and railway signalling. The consortia has 30 months to provide the supply and installation of the equipment in the Line 8 (Diamante Line) and 48 months to complete Line 10 (Turquesa Line) and Line 11 (Coral Line).
MENDES JNIOR Av. Joo Pinheiro, 146 6 andar Centro 30130-927 Belo Horizonte, MG Tel.: +55 31 2121-9442 www.mendesjunior.com.br
MENDES JNIOR is a company that has been in business since 1953 in the heavy construction market in Brazil and abroad, developing projects in the segments of road and high- way construction, railway, subway, port, hydroelectric, thermo electrical, petroleum and gas, ducts, urban sanitation, irrigation channels and industrial maintenance both onshore and off- shore.
In the railway sector, Mendes Jnior worked for Metr SP, Metr Rio, CBTU BH and Queiroz Galvo/TTrans consortia (VLT Paulisto). The consortia Mendes Jnior /Sanches Tripoloni /Fidens will be responsible for Lot 5, from the end of the bridge over the So Francisco River to Riacho da Barroca, a stretch of 162,04 km.
OAS Av. Anglica, 2.346 Consolao 01228-200 So Paulo, SP Tel.: +55 11 2124-1122 www.oas.com.br
OAS started its activities in 1976 in civil construction. Since then the company has moved into other areas such as heavy con-
34 | The Brazilian Market for Railway Technologies
struction, environment, public bids, and oil and gas. Since 2003, the company has more actively moved into government invest- ment programs, especially in the petroleum and gas and energy areas, in major private companies, and in infrastructure pro- grams of the Brazilian Federal Government.
In the railway sector, OAS has worked for the extension of Metr SP (line 2 and 4) and Metr Recife.
ODEBRECHT Praia de Botafogo, 300 - 10 andar Botafogo 22250-040 Rio de Janeiro, RJ Tel.: +55 21 2559-3000 www.odebrecht.com.br
Picture 8: Odebrecht Engineer at Construction Site
Source: Luis Ushirobira/Valor
Odebrecht is a Brazilian business conglomerate that was founded in 1944. The group is present in South America, Cen- tral America, the Caribbean, North America, Africa, Europe and the Middle East. Odebrecht is a major company in the engineer- ing, construction, chemical and petrochemical sectors. The company also has a stake in the infrastructure and public ser- vice sectors in Brazil and Portugal and mining and oil ventures in Africa. According to CBIC, it is the largest construction com- pany in Brazil.
Odebrecht is a transport, infrastructure and logistics company from Odebrecht Group. The company has purchased 61% of SuperVias shares and will have its concession contract ex- tended by 25 years. SuperVia is an urban train operator in the State of Rio de Janeiro and has 13 years of its concession contract remaining. Odebrecht will invest in SuperVia in order to improve the quality of the operation which has registered acci- dents and other setbacks. SuperVia plans to invest BRL 2,3 billion between 2010 and 2020. BRL 1.1 billion will be spent on 90 rails that will be bought by the government of the state of Rio de Janeiro.
PELICANO CONSTRUES Av. Joo Palcio, 166 Eurico Salles 29160-161 Serra, ES Tel.: +55 27 3298-5200 www.pelicano.eng.br
The company was founded in 1980 and works in the railway, industrial and urban construction, maintenance and reshuffle segments. Pelicano is part of Oeste-Leste Barreiras consortia, which won Lot 7 of Ferrovia de Integrao Oeste-Leste (FIOL) in the stretch between Rio das Fmeas and Estrada Vicinal de Acesso BR 135.
QUEIROZ GALVO Av. Rio Branco, 156 - 30 andar 20040-901 Rio de Janeiro, RJ Tel.: +55 21 2131-7100 www.queirozgalvao.com
Queiroz Galvo was founded in 1953 and currently develops projects in several engineering areas. For 57 years, the parent company has seen outstanding results in diverse projects in all of the Brazilian states, covering: buildings, railroads, hydroelec- tric power plants, urban infrastructure, transmission lines, indus- trial assembly, bridges, tunnels and viaducts, ports and airports, subway system and highways, among others.
Queiroz Galvo, OAS, Bombardier Brasil and Bombardier Transport will be responsible for the manufacture, supply and deployment of the monorail system for the extension of Line 2 Verde of Metr SP, the Expresso Tiradentes. The consortia, lead by Queiroz Galvo, won a BRL 2.46 billion bid. The mono- rail will have 23.8 km of extension and will connect Vila Pru-
The Brazilian Market for Railway Technologies | 35 dente to Cidade Tiradentes. Around 500.000 users are served per day. The project is part of the Expansion Plan of the Gov- ernment of the State of So Paulo.
5.2 Electric Installation Suppliers. ADELCO SISTEMAS DE ENERGIA LTDA. Av. da Cachoeira, 660 - Conj. 706 06413-000 Barueri, SP Tel.: +55 11 4199-7500 www.adelco.com.br
The company provides batteries, AC power conditioning, rectifi- ers/ battery charges.
ARTECHE EDC Rua Juscelino K. de Oliveira, 11400 CIC 81450-900 Curitiba, PR Tel.: +55 41 2106-1899 www.arteche.com
The Spanish Group Arteche is present in Brazil with an own subsidiary in Curitiba, PR, plus two commercial offices in the cities of So Paulo and Fortaleza. The company provides solu- tions in electrification and signaling (generation, transmission, distribution and industry), including auxiliary and protection relays for rolling stock, electrification, blockage and signaling.
BALFOUR BEATTY RAIL POWER SYSTEMS BRAZIL Av. Maria Coelho Aguiar, 215 - Bloco B - 3 andar 05805-000 So Paulo, SP Tel.: +55 11 4161-3235 www.bbrail.com
The company provides electrification systems, signalling and overhead network maintenance.
Currently, they are part of the consortia operating Line 5 of Metr So Paulo, along with Alstom, Siemens, TTrans, Bom- bardier and Faon.
CONCEITO TECNOLOGIA LTDA. Rua Itatiaia, 291 04310-010 So Paulo, SP Tel.: +55 11 5585-1242 www.conceitotecnologia.com.br
EFACEC DO BRASIL Av. Miguel Estfno, 203 04301-010 So Paulo, SP Tel.: +55 11 5078-8900 www.efacec.com.br
Efacec works in the area of substation automation, control, protection and supervision, command centres for energy net- works, DC and AC feeds as well as telecommunications.
FAON ELETROMECNICA Rua Amamba, 852 02115-001 So Paulo, SP Tel.: +55 11 2634-5959 www.facon.com.br
The company provides electric and electronic systems, com- mand panels, power controls for substations and EUTs, and revenue control. It also works with rolling stock and railroad signalling.
Currently, they are part of the consortia operating Line 5 of Metr So Paulo, along with Alstom, Siemens, Balfour Beatty, TTrans and Bombardier.
FONSECA ALMEIDA COMRCIO E INDSTRIA Rua da Ajuda, 35 - 14 andar 20040-000 Rio de Janeiro, RJ Tel.: +55 21 2544-8000 www.fonsecaalmeida.com.br
The company provides electrification and signalling equipment: signalling systems, ATC and ATS systems, distribution and rectification of energy systems, impedance bonds, switch ma-
36 | The Brazilian Market for Railway Technologies
chine systems, vital relay systems, highway crossing equip- ment, track isolation systems and infra-structure monitoring systems.
HARTING LTDA. Av. Dr. Lino de Moraes Leme, 255 04360-001 So Paulo, SP Tel.: +55 11 5035-0075 www.harting.com.br
Harting provides industrial connectors (electric and electronic), jumper cables, industrial ethernet (switches, connectors and cables), special cables, railway relays, plastic and metallic conduits and cable glands.
NEXANS FICAP Rua Tenente Negro 140 7 Andar 04530-030 So Paulo, SP Tel.: +55 11 3048-0803 www.nexans.com.br
Nexans Ficap provides cables for rolling stock, cables and wire for right-of-way. The global Nexans Group incorporated the Brazilian company Ficap.
REIPLAS INDSTRIA E COMRCIO DE MATERIAL ELTRICO Rua Francisco do Pilar, 1 05136-070 So Paulo, SP Tel.: +55 11 3839-4000 www.reiplas.com.br
The company provides wire and cables for overhead network and grounding purposes.
RTA - REDE DE TECNOLOGIA AVANADA Rua Dom Aguirre, 515 04671-390 So Paulo, SP Tel.: +55 11 2171-3244 www.rta.com.br
RTA provides equipment to protect overhead network dis- charges.
SATURNIA SISTEMAS DE ENERGIA Rua Aurlia Luiza M. Zanon, 600 18087-100 Sorocaba, SP Tel.: +55 15 3235-8000 www.saturnia.com.br
The company provides stationary and tractioned batteries and outdoor cabinets in addition to metro-rail emergency systems.
SIEMENS Av. Mutinga, 3.800 05110-901 So Paulo, SP Tel.: +55 11 3908-2021 www.siemens.com.br/transporte
Siemens develops systems, traction, EUTs and turn-key sys- tems.
STEMMANN INDSTRIA E COMRCIO Rodovia Marechal Rondon, Km 133 - C.P. 76 18540-000 Porto Feliz, SP Tel.: +55 15 3261-9190 www.stemmann.com.br
The company makes catchment shoes, pantographs and landfill contacts.
WIREX Av. Casa Grande, 1.960 Piraporinha 09961-350 Diadema, SP Tel.: +55 11 2191-9455 www.wirex.com.br
Wirex makes halogen-free low voltage and medium voltage cables, for use in locomotives and other railroad vehicles.
The Brazilian Market for Railway Technologies | 37 5.3 Passenger Information / Ticket Vending Systems. AES AUTOMAO E SISTEMAS Rua Domingos Barbieri, 294 05531-060 So Paulo, SP Tel.: +55 11 3721-5333 www.aes.com.br
The company is responsible for railroad and subway access control systems.
The company provides electronic ticketing systems.
EMPRESA 1 - SISTEMAS DE AUTOMAO E COMRCIO Rua dos Inconfidentes, 1190 - 12 andar 30140-120 Belo Horizonte, MG Tel.: +55 31 3262-3261 www.empresa1.com.br
Empresa 1 makes data collectors and validators for electronic ticketing systems.
TTRANS Rua Natingui, 1487 05443-002 So Paulo, SP Tel.: +55 11 3039-1000 www.ttrans.com.br
Ttrans is responsible for concessions, turn key and BOTs for entire subway and train systems and electronic ticketing sys- tems.
WOLPAC SISTEMAS DE CONTROLE Rua Iijima, 554 08533-200 Ferraz de Vasconcelos, SP Tel.: +55 11 4674-1777 www.wolpac.com.br
The company makes turnstiles, electronic turnstiles and revolv- ing doors for train platforms.
Picture 9: Slim High Flow System by Wolpac
5.4 Fleet Management. ADVANTECH BRASIL Rua Caramuru, 374 04138-001 So Paulo, SP Tel.: +55 11 5592-5352 www.advantech.com.br
The global Advantech Group has open commercial branch offices in Brazil.
They are specialized in ITS - Intelligent Transport Systems: railway signal monitoring system, train safety monitoring and diagnosis system as well as metro station fire alarm systems.
ALFATEST Av. Presidente Wilson, 3009 04220-000 So Paulo, SP Tel.: +55 11 2065-4700 www.alfatest.com.br
Alfatest specializes in GPS location of locomotives.
38 | The Brazilian Market for Railway Technologies
The company makes locomotive satellite tracking systems.
CIM SANEAMENTO INSTRUMENTAL Rua Prefeito Olmpio de Mello, 1525 20930-001 Rio de Janeiro, RJ Tel.: +55 21 3890-3645 www.cimsaneamento.com.br
CIM makes traffic control equipment.
ENGESIS ENGENHARIA E SISTEMAS Praa Asdrubal Soares, 31 Ed. Schneider 29040-720 Vitria, ES Tel.: +55 27 3204-7555 www.engesis.com.br
Engesis provides railroad automation systems.
SYSFER CONSULTORIA E SISTEMAS Rua da Assemblia, 10 - Sala 2820 20011-901 Rio de Janeiro, RJ Tel.: +55 21 2531-2303 www.sysfer.com.br
The company develops railroad management systems, perfor- mance indicator panels, railroad occurrence systems, patio and terminals systems.
WYMA TECNOLOGIA Rua Climaco Barbosa, 179 - Cambuci 01523-000 So Paulo, SP Tel.: +55 11 3274-7011 www.wyma.com
WYMA develops electronic LED Displays.
5.5 Signalling. AGIRE Implantao de Sistemas Ltda Rua Santa Eufmia, 20 - Tatuap 03420040 So Paulo, SP Tel.: +55 11 6192-4563 www.agiresistemas.com.br
The company makes industrial connectors (electric and elec- tronic), jumper cables, industrial ethernet (switches, connectors and cables), special cables, railway relays, plastic and metallic conduits and cable glands.
ALSTOM BRASIL Av. Raimundo Pereira de Magalhes, 230 05092-901 So Paulo, SP Tel.: +55 11 3643-2430 www.alstom.com.br
Alstom Brasil is responsible for traffic signalling and control systems, traction engines and EUTs.
BOMBARDIER TRANSPORTATION BRASIL Av. Maria Coelho Aguiar, 215 - Bl. C - 1 andar 05805-000 So Paulo, SP Tel.: +55 11 3748-9700 www.bombardier.com
The company develops EUTs and systems.
COBRASIN BRASILEIRA DE SINALIZAO E CONSTRUO Rua Manoel Oliveira Pessoa Jr., 46 02471-220 So Paulo, SP Tel.: +55 11 3981-1563 www.cobrasin.com.br
The company makes railroad LED-based signals.
The Brazilian Market for Railway Technologies | 39 DATAPROM - EQUIPAMENTOS E SERVIOS DE INFORMTICA INDUSTRIAL Av. Repblica Argentina, 2403 Cj. 82 80610-260 Curitiba, PR Tel.: +55 41 3014-1200 www.dataprom.com
Dataprom makes and services electronic ticketing systems, data collectors, fleet management, railroad traffic control sys- tems, access control and dynamic weighing.
EMBRASIN - EMPRESA BRASILEIRA DE SINALIZAO Rua Boaventura, 46 31270-020 Belo Horizonte, MG Tel.: +55 31 3491-1095 www.embrasin.com.br
The company makes railroad signalling signs, railroad signal lights, highway-railroad signalling and automatic grade-crossing gates, midget signals and electronic traffic controllers.
ERICO DO BRASIL Rua Dom Pedro Henrique de Orleans e Bragana, 276 05117-000 So Paulo, SP Tel.: +55 11 3621-4111 www.erico.com
The global Erico Group is present in Brazil, offering its rail and industrial products.
ICR INDSTRIA E COMRCIO DE RELS Av. General Ataliba Leonel, 3381 02242-001 So Paulo, SP Tel.: +55 11 6951-9476 www.icr-reles.com.br
The company makes relays for railroad applications.
INDSTRIA E COMRCIO DE TRANSFORMADORES COSMO Rua Francisco Luiz Garcia, 82 13602-052 Araras, SP Tel.: +55 19 3541-6166 www.transformadorescosmo.com.br
The company produces impedance bonds; antennas; transfor- mers and reactors.
MEG ELETROMECNICA INDSTRIA E COMRCIO Rua Brigadeiro Galvo, 855 01151-000 So Paulo, SP Tel.: +55 11 3825-6406 www.meg-eletromec.com.br
The company makes components for signalling and grade crossings, special milled parts, moulded parts and injected parts to design specifications.
TRENDS ENGENHARIA E TECNOLOGIA Rua Lencio de Carvalho, 234 - 3 andar 04003-010 So Paulo, SP Tel.: +55 11 3178-3600 www.trendseng.com.br
The company makes automatic vehicle locators, radio commu- nication systems, sound systems, grade crossing signalling and video survey of tracks.
40 | The Brazilian Market for Railway Technologies
5.6 Telecommunications. ALBATROS DO BRASIL LTDA Rua Colnia da Glria, 414 04113-001 So Paulo, SP Tel.: +55 11 5084-3155 www.albatrosbrasil.com.br
Albatros produces static inverters, CFTV, multimidia, train-land transmission system, train diagnostic system and maintenance of air-conditioning equipment.
Albatros do Brasil was founded in 1997 as a Spanish holding Corporacin Albatros branch.
HUBER+SUHNER AMRICA LATINA Rodovia Presidente Dutra Km 154,7 Prdio 4 12240-420 So Jos dos Campos, SP Tel.: +55 12 3946-9511 www.hubersuhner.com.br
Huber+Suhner America Latina is part of the Swiss Hu- ber+Suhner group.
The company makes electric and optical components and sys- tems for connectivity in subway and metropolitan trains, radio frequency technologies, fibre optics, cables and polymers.
SYSFER Rua da Assemblia, 10 Cj. 2820 20011-901 Rio de Janeiro, RJ Tel.: +55 21 2531-2303 www.sysfer.com.br
The Brazilian Market for Railway Technologies | 41 6.1 Overview of the sector. Brazil has been a manufacturer of rolling stock since the 1940s, when the government started its drive to develop heavy indus- tries. The industry was hard hit by the general decline of rail transport in the 1980s and early 1990s (see Diagrams 3, 4 and 5). Its renaissance through private concessions has provided an incentive to upgrade the national railway industry in the seg- ment of railroad cars and their components.
In December 2007, Brazilian railway operators owned a total of 2593 locomotives and 88.133 cars. Data showed that rolling stock has more than doubled in a decade. In 1997, there were 1144 locomotives and 43.796 cars with several scrapped units.
A considerable part of the rolling stock is imported; national production is below national demand. In recent years, however, the railway equipment industry has shown signs of growth. According to the industry association Abifer, it now has a capac- ity to manufacture 12.000 cars, 400 passenger cars and light- weight locomotives per year. In 2008, the revenue in the sector was estimated at BRL 2.6 billion, representing an increase of 30%.
Table 19 presents the Brazilian rolling stock manufacture volumes in the last ten years:
The most common cars are: BOX CAR: For dry bulks, bagged, boxes, unitized freight and transport of products that can not be exposed to the environ- ment; GONDOLA CAR: For dry bulk and diverse products that may be in open places; HOPPER: Closed or open for dry and corrosive bulk; ISOTHERMAL: For frozen products in general; FLAT CAR: Containers, steel products, large volumes, woods and large pieces; TANK CAR: For transport of fuels and bulk cement; SPECIALS: For products with specific features.
42 | The Brazilian Market for Railway Technologies
The production of locomotives only started in 1967. According to ANTF, most locomotives used in the Brazilian railways are those with diesel-electric engines. Some companies (like GE) are now developing flex fuel engines which could run on bio- diesel, which is produced in large quantities in remote areas of Brazil.
Table 20 shows the Brazilian exports of rolling stock, again distributed into wagons, passenger coaches and locomotives. A significant amount of national production, particularly concern- ing passenger coaches and locomotives manufacture, is ex- ported every year.
In fact, when locomotive production is taken separately, one notes that all Brazil-made units were exported in the last ten years. The same does not happen when we look at the wagon export.
With regard to business perspectives for the next couple of years, CBTU operates both EMUs and diesel train rail systems. Regarding the Belo Horizonte and the Recife transport systems, which are operated by means of EMUs, a larger demand is forecasted. In Belo Horizonte, 25 EMU systems were recently purchased and another 10 are expected to be purchased soon. In Recife, the company also recently acquired 25 EMUs, in addition to 15 trains made up of four cars.
Regarding CBTU units in Natal, Joo Pessoa and Macei, trains are still working on a diesel powered locomotive basis in Recife there are also some working on the same basis. In both cases, auxiliary rail vehicles are often demanded, aimed at railroad maintenance.
For CBTU Rio de Janeiro, the priority for new acquisitions is replacing old locomotives from the fiftys and sixtys that are still operating in CBTUs diesel powered units. This year, CBTU purchased a group of LRVs from CAF, a Spanish-Brazilian company.
SuperVia recently acquired 23 EMUs, four car compositions, and also some trains from foreign manufacturers. Apparently there are no restrictions on acquiring spare parts from a com- pany of a different nationality than the original supplier.
In addition to the 30 EMUs recently purchased, they have just opened a bidding process for 60 new railtrain compositions. The numbers correspond to the demand created by the railroad extension projects, and in order to go through fleet renovation they expect another 120 EMUs in the near future.
The Brazilian Market for Railway Technologies | 43 6.2 Manufacturers. In Brazil, the main locomotive and car manufactures are:
ALSTOM BRASIL Av. Raimundo Pereira de Magalhes, 230 05092-901 So Paulo, SP Tel.: +55 11 3643-2430 www.alstom.com.br
In Brazil, Alstom has been present in the market for over 55 years and has more than 5000 employees. Alstom offers rolling stock products for metropolis metros, citadis tramways, tram- trains citadis dualis and Regio Citadis, Coradia regional trains, suburban trains, Prima II locomotives, Pendolino high-speed trains, Duplex very high-speed trains and AGV very high-speed trains.
Alstom offers a very wide range of rolling stock, covering the entire rail transport market from very high speed to light urban transport, including metros, tramways, suburban and regional trains and locomotives.
Its services also cover maintenance, renovation and logistics chain management for supplying spare parts, leading turnkey projects, client training and technical advice.
Alstom Metropolis trains have their engineering and manufac- turing performed by the Lapa industrial unit, in So Paulo for the manufacturing of stainless steel cars.
CPTM recently awarded Alstom Transport a EUR 80 million contract to supply nine electric multiple-units. Part of Alstom's Metropolis range, the eight-car 1 600 mm gauge 3 kV DC units will be produced at Alstom's Lapa plant for delivery by mid- 2012. They will be designed for easy access with gangways between cars and will be equipped with dynamic travel informa- tion and air-conditioning, and safety measures will include CCTV, smoke detectors and a fire extinguishing system.
Amsted Maxion is involved in the development and manufactur- ing of steel and aluminum cargo freight cars, cast steel wheels, bogies, wheel and axle sets and shock absorption and traction systems, in addition to providing the following services: repair, adaptation and modernization of freight cars and their compo- nents.
Amsted Maxion was created from the association between the US company Amsted Industries Inc. and the Brazilian company Iochpe-Maxion, a successor to FNV - Fbrica Nacional de Vages, founded in 1943. It claims to be responsible for almost 50% of the fleet, with more than 91.000 cars on the Brazilian railroads, and to hold an average share of 70% in that segment.
The company has also created (in partnership with Voith) the first DH10 Diesel-Hydraulic Locomotive manufactured in Brazil, which has been especially developed for maneuvering services. It may be used either in cargo or passenger lines, on non- electrified systems.
In the largest steel casting plant of South America, parts of up to 6 tons are manufactured for application in machinery and indus- tries of civil construction, mining, siderurgy, automobile and railway. Some of Amsted Maxion clients are ALL, ArcelorMittal, Bunge, Cargill, CSN, Ferroeste, FTC, MRS, Transnordestina, Usiminas and Vale.
Amsted-Maxion sold 2140 wagons in 2010 and expects a 50% increase in 2010, based on orders already received. According to the companys President, Mr. Ricardo Chuahy, special incen- tives (loans with almost no real interest) provided by the BNDES helped the company greatly to overcome the slump in demand it had experienced in 2009.
44 | The Brazilian Market for Railway Technologies
BOMBARDIER TRANSPORTATION Av. Maria Coelho Aguiar, 215 - Bl. C - 1 andar 05805-000 So Paulo, SP Tel.: +55 11 3748-9700 www.bombardier.com
With operations in 35 countries, Bombardier Transportation leads the worlds rail equipment manufacturing and servicing industry. The companys 33.800 employees provide rail trans- portation solutions, including: Rail vehicles - automated people movers, monorails, light rail vehicles, advanced rapid transit, metros, commuter/regional trains, intercity/high-speed trains and locomotives; Propulsion and controls - complete product portfolio for appli- cations ranging from trolley buses to freight locomotives; Bogies - product portfolio for the entire range of rail vehicles; Services - fleet maintenance, operations and maintenance (O&M), vehicle refurbishment and modernization, and mate- rial management; Transportation systems - customized design-build-operate- maintain transportation system solutions; Rail control solutions - advanced signaling solutions for mass transit and mainline systems.
To install the technology center to build monorails and meet future demand, Bombardier Brazilian plans to double the size of its manufacturing plant in Hortolndia (SP). Currently, the unit has two sheds and will build another two sheds and five booths of train painting, totaling 20.000 m2 of industrial area in 2011.
Bombardier is a member of the Consrcio Expresso Monotrilho Leste, also called by Expresso Tiradentes. The company has a contract with CPTM and will design, supply and install a 24 km INNOVIA Monorail 300 system.
The new line will serve as an extension of the So Paulo sub- way Line 2 and will have the capacity of transporting 40.000 passengers per hour in either direction. The company will de- sign and supply system-wide elements for the 24 km, 17 station INNOVIA Monorail system, including 54 seven-car trains (358 cars).
The manufacturing of the initial cars will be carried out by Bom- bardier in Pittsburgh, USA, and subsequent cars will be built at the Brazilian plant in Hortolndia (SP).
Currently, Bombardiers most important contracts are the refor- mulation of 156 cars for Metr SP and maintenance for CPTM.
BOM SINAL Indstria e Comrcio Ltda Av. Jos Bernardino, km 2,5 Rodovia CE 096 63180-000 Barbalha CE Tel.: +55 88 3532-0704 www.bomsinal.com
Bom Sinal is a Brazilian manufacturer of LRVs which has been operating in this market for over 5 years. They are based in Barbalha (Cear State), in the northeastern region of Brazil and have other units in Fortaleza (Cear) and in So Manuel (State of So Paulo).
The company has a partnership with Voith to transfer technolo- gy from Germany to Brazil.
Picture 10: Light Rail Vehicle made by Bom Sinal
With approximately 1000 employees, Bom Sinal has a portfolio of 3 types of LRV: Mobile 2 (2 cars/ capacity of 358 passen- gers), Mobile 3 (3 cars/ 562 passengers) and Mobile 4 (4 cars/ 766 passengers). These models run on diesel or biodiesel, not on electricity as other LRVs.
Its commercial activity is concentrated in the northeastern re- gion of the country and customers include CBTU (Companhia Brasileira de Trens Urbanos), State Government of Cear, Metr Fortaleza and the cities of Arapiraca and Maca.
The Brazilian Market for Railway Technologies | 45 The company has recently delivered the second LRV to Forta- leza and 6 more are to be delivered in the next 6 months. Ac- cording to commercial director Mrcio Florenzano, 8 vehicles are to be delivered to Macei between August 2010 and Janu- ary 2011; 5 vehicles are to be delivered to the city of Sobral until August 2011.
Bom Sinal also operates in the segment of plastic furniture for stadiums, hospitals and schools.
CAF BRASIL INDSTRIA E COMRCIO Rua Tabapu, 81 - 10 Andar Itaim Bibi 04533-010 So Paulo, SP Tel.: +55 11 3167-1720 www.cafbrasil.com.br
CAF is one of the international market leaders in the design, manufacture, maintenance and supply of equipment and com- ponents for railway systems. The Spanish company has a prod- uct range from complete transportation systems (high- speed, locomotives, regional trains, commuter trains / electric motorcars, metro unit trains and streetcars and light rail trains) and turnkey solutions for custom-made parts and components. CAF also offers maintenance, upgrade and overhaul of vehicles and components, after sales technical assistance, operation of administrative concessions and financing.
Picture 11: New CAF plant in Hortolndia (So Paulo State)
CAF Brazil produces regional rails in its factory located in Hor- tolndia (SP). This BRL 150 million plant was opened in Janu- ary 2010. CAF already had orders from CPTM for 48 suburban trainsets. It has secured another contract for supplying 36 trains for CPTMs Line 8, through a PPP (public private partnership), including the maintenance of the fleet during 20 years. The delivery of the first EMU of this new contract is foreseen for March of 2011.
There is a project to reactivate regional trains in Sorocaba and Santos. The company is interested in this project because they manufacture regional trains. According to the commercial man- ager, the company is presenting itself to the State Government as a potential partner of rolling stock for the regional rails project.
CAF intends to provide Brazil with the rail model S 121 through technology transfer from its headquarters in Spain. For dis- tances of 150 km, the train can reach a speed of 200 km/h. The train can hold 300 passengers and has reclining seats in differ- ent positions.
Formed in 2001 by professionals with vast experience from design and manufacture to maintenance services and repair of locomotives, EIF operates in the railway market offering the following services: rental/leasing of locomotives, new locomo- tives marketing (shunt and mainline units), sale of used locomo- tives from the North American market, gauge adaptation, refur- bishment, retrofit and start-up services in Brazil, logistics opera- tions (railroad in North-America and ocean freight to ship to Brazil), parts sales, overhaul and maintenance of permanent way maintenance equipment and repair of wagons/ freight cars
EIF has a manufacturing plant that comprises an area of 4000 m2 located in Trs Rios, having received tax incentives from the Rio de Janeiro state government; investments amount to BRL 6.1 million. The railroad access plant receives both gauge for locomotive building and restoration.
The company operates with all railroad equipment; manufactur- ing new locomotives, refurbishing, maintaining, adapting and
46 | The Brazilian Market for Railway Technologies
leasing locomotives, refurbishing railroad cars, passenger car trucks, maintaining and adapting large equipment for mainten- ance of railroads.
EIF provided products and services for CSN, Vale, MRS Logstica, ALL, Usiminas, CTS, SuperVia, CBTU-STU/REC, Consrcio Nova Via, GMF/COMSA, CPTM, Cenibra and Ger- dau Aominas.
GEVISA S.A (GE TRANSPORTATION) Av. General David Sarnoff, 4.600 32210-100 Contagem, MG Tel.: +55 31 2103-5333 www.getransportation.com.br
GE Transportation is a global technology leader and supplier to the railroad, marine, drilling, wind and mining industries. GE provides freight and passenger locomotives, railway signalling and communications systems, information technology solutions, marine engines, motorized drive systems for mining trucks and drills, high-quality replacement parts and value added services.
GE Transportation has been present in Brazil since 1962 and sold more than 1000 engines to 15 countries since then. For some time, Gevisa (GE) was inactive due to a lack of demand. However, in 2005, the company started to manufacture locomo- tives (up to 4500 HP) again.
The president of GE Transportation, Mr. Lorenzo Simonelli, announced the signing of the largest locomotive purchase agreement in Brazil. The agreement was signed with MRS Logstica in September 2010. It covers an initial 115 AC44i locomotives to be delivered between 2011 and 2015 for use on 1600 mm gauge heavy haul iron ore trains, with an option to purchase 100 additional units. The size of the order means GE will be able to increase the local content to more than 50%.
KNORR BREMSE BRAZIL Av. Engenheiro Euzbio Stevaux, 1.071 04696-902 So Paulo, SP Tel.: +55 11 5681-1117 www.knorr-bremse.com.br
Knorr-Bremse is one of the leading manufacturers of brake and on-board systems for rail vehicles. The company product portfo- lio includes, apart from complete braking systems for all types of rail vehicles, door systems, air conditioning installations, control components and windscreen wipers. With design, mar- keting and servicing centres, the company is present in 25 countries around the world.
Knorr-Bremse started its activities in Brazil initially offering rail products in 1977 as an independent department inside of the MWM plant named Indstria de Freios Knorr Ltda.
MWL BRASIL (GERMAN GMH GROUP) Rodovia Vito Ardito, S/N Km 1 12282-535 Caapava, SP Tel.: +55 12 3221-2400 www.mwlbrasil.com.br
As of June 2010, MWL Brasil became part of the German GMH Group. The company's specialties in railway and industrial product manufacturing are: railroad wheelset, forged railroad wheel, forged railroad axle, forged crane wheel, forged steel sheaves, forged steel gear rough pieces, vacuum degassed, microalloy and carbon steel ingot.
PIFER PROJETOS DE INTERIORES FERROVIRIOS Rodovia BR-040, km 18,5 - Galpo D 25812-470 Trs Rios, RJ Tel.: +55 24 2252-5429 www.pifer.com.br
PIFER is a Brazilian company specialized in railway interiors and is located in Rio de Janeiro. The company helps with all project stages, manufacturing and assembly of parts and com- ponents for commuter, urban and regional trains.
The company does project and production of benches, panels and fiber glass components for public transportation vehicles.
The Brazilian Market for Railway Technologies | 47 PROGRESS RAIL Rua Georg Rexroth, 609 09951-000 Diadema, SP Tel.: +55 11 4071-1234 www.progressrail.com
Progress Rail Services, a subsidiary of Caterpillar Inc., was established in Brazil in June of 2008, acquiring the total share- holding control of MGE Transportation, one of the larger suppli- ers of railroad services in Brazil.
The company is focused on two main areas: Locomotive & Railcar Services and Engineering & Track Services.
In the track area, the company provides rail, track work, signals, maintenance-of-way equipment and rail welding. In addition to tracks, the company provides locomotive and railcar services, reconditioned parts, wheels, axles and bearings. The recycling and brokerage group oversees the reclamation of used rail, wrecked and retired railcars and locomotive, and other scrap metal.
Progress Rail Services provide services to some of the main railroad companies, such as ALL, CFN, FCA, FTC, Ferroeste, Ferroviaria Oriental, MRS, Vale and for some of the main opera- tors of transit passenger transportation, such as CPTM So Paulo, CBTU, Metr Braslia, Metr SP and SuperVia.
RANDON S.A IMPLEMENTOS E PARTICIPAES Av. Abramo Randon, 770 95055-010 Caxias do Sul, RS Tel.: +55 54 3209-2000 / 3209-2194 www.randon.com.br
Randon claims to be the largest manufacturer of rail and road trailers and semi-trailers in Latin America and since 1998 has been operating in the freight railway sector.
The company produces the following kinds of wagons: Gondola: Transport of iron ore; Hopper: Transport of various types of grain, limestone and others; Tank: Transport of fuels and bulk cement; General Cargo: Transport of grains and general cargo; and Platform: Transport of containers and general cargo.
In the Brazilian freight car market, Randon aims at a market share of 30%. Like its competitors, the company has recovered from the recession, selling almost 1000 wagons in 2010. For 2011, it projects to sell 1200 units.
Picture 12: Freight car made by Randon
SANTA F VAGOES Av. Osvaldo Cruz, 498 97095-470 Santa Maria, RS Tel.: +55 55 2101-8121 www.santafevagoes.com.br
Santa F Vages produces rail cars for different uses, custo- mized according to each clients requirements. Some of the available models are: closed rail car for vehicles; closed rail car with telescopic doors, closed rail car with side doors, container rail car, flat rail car, gondola rail car, grain rail car, multiuse rail car, piggy back rail car and sider rail car and tank rail car.
The company also remanufactures and makes transformations of wagons, including resizing and new project boxes, cut and removal of old boxes and structures, manufacturing and assembling of new boxes and structures while always respect- ing the specifications of each customer.
SIEMENS MOBILITY Av. Mutinga, 3.800 05110-901 So Paulo, SP Tel.: +55 11 3908-2021
48 | The Brazilian Market for Railway Technologies
www.mobility.siemens.com
Siemens had its first project in Brazil in the year 1867, with the installation of the first telegraph line between Rio de Janeiro and Rio Grande do Sul. In 1905 the company set up a unit in the country. Since 2009, Siemens has had an industrial plant in Cabreva (SP) for retroffiting, maintenance and production of urban trains and components for the railway segment.
The Mobility Division won several contracts in 2009 such as refurbishment of 25 trains for So Paulos subway Line 1 and will supply a complete electrification system that includes 14 rectifier substations for Brasilias new Light Rail Train.
Siemens is a supplier and system integrator for the rail trans- portation sector. The company offers products for mass transit, regional and main line services for passengers and cargo.
Siemens provides maintenance, spare parts, modernization and accident repair in addition to testing and validating rail systems.
6.3 Maintenance / Workshops. AJAPREST Rua 18, 47 - Santa Mnica 29100-000 Vila Velha, ES Tel.: +55 27 3035-0870 www.ajaprest.com.br
Ajaprest works in varying segments within the rail sector, such as: railroad and AMVs construction and maintenance, metallic structures and railroad maintenance services in general.
CHAR POINTER TECNOLOGIA Calada das Tulipas, 35 - Centro Comercial de Alphaville 06453-020 Barueri, SP Tel.: +55 11 4191-3163 www.charpointer.com.br
Char Pointer Tecnologia was founded in 1998 and specializes in engineering, cartography and software solutions development. Last year, Char Pointer built an international office in Madrid so that they could start operating in the European market. This year, the company started working as a distributor for the Swiss company Amberg Technologies, which provides tunnel and railroad survey solutions.
HASTLEV MANUTENO MECNICA E HIDRULICA Rua Doze de Maio, 465 Vila Galvo 070056-1220 Guarulhos, SP Tel.: +55 11 2452-7654 www.hastlev.com.br
The company makes rail mechanical power jacks, hydraulic cylinders, angle gearboxes and cable stretchers.
PLASSER DO BRASIL Rua Campo Grande 3050 - Campo Grande 23070-000 Rio de Janeiro, RJ Tel. +55 21 2415 0232 www.plassertheurer.com
Plasser do Brasil is a partner firm of the global Plasser&Theurer Group.
THERMIT Rua Sargento Silvio Hollenbach, 601 21530-200 Rio de Janeiro, RJ Tel.: +55 21 2472-4912 www.goldschmidt-thermit.com/pt
Thermit is part of the global Goldschmdit Thermit Group.
HOLEMAKER Rua Guiomar da Rocha, 97 Casa Verde 02521-060 So Paulo, SP Tel.: 0800 77 25 842 www.holemaker.com.br
Holemaker is specialized in renting railroad tools, like impact wrenches, rail drills, weld debarring and rail skipjacks.
The Brazilian Market for Railway Technologies | 49 7.1 Import Volume and Trends. The Brazilian import and export statistics presented in this Chapter are based on Chapter 86 of the HS Nomenclature, which concerns railway and tramway locomotives, rolling-stock and parts thereof; railway or tramway, track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) and traffic signalling equipment of all kinds.
It is important to note that the tariff code used in Brazil is the Mercosur Common Tariff Code (Nomeclatura Comum do Mer- cosul - NCM), which is used in all of the countries that comprise the Mercosur economic block (Brazil, Argentina, Uruguay and Paraguay).
Diagram 6 and Table 21 show the evolution of Brazilian imports, related to Chapter 86, within the last decade:
Table 21: Brazilian Imports under NCM Chapter 86 Year Import US$ 2000 123.527.419 2001 95.084.249 2002 94.400.088 2003 39.236.142 2004 148.831.856 2005 221.198.018 2006 280.157.100 2007 220.407.295 2008 523.985.206 2009 260.029.363 2010* 979.883.911 Source: Brazil Trade Net. Value for 2010 is for January thru October.
There has been a significant increase in Brazilian demand for this sort of equipment, especially during 2010. This corresponds (but exceeds) trends in other sectors and can be explained by (1) the backlog of orders suspended in 2009 and (2) the Brazili- an currencys valuation in 2010.
Table 22 (see next page) presents a closer look at Brazils rail product imports in the recession year 2009. The right column shows the total amount Brazil imported in 2009 of every distinct NCM code covered by Chapter 86. There are some products that Brazil did not purchase, indicated with a dash, but that does not mean that during the current year it has not continued to import.
The codes from 8601 to 8606 correspond to products that can be counted in terms of units, which also represent the biggest amount traded. The rest of chapter 86 refer to parts used by the rail industry, as well as assembling other components to be used as spare parts or for any other purpose.
7. Import of Railway Equipment.
50 | The Brazilian Market for Railway Technologies
Table 22: Suggested NCM Codes for Rail Products
NCM NCM Description Imports 2009 (US$) 86 Railway and tramway locomotives, rolling-stock and parts thereof; railway or tramway, track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds 260.029.363 8601 Rail locomotives powered from an external source of electricity or by electric accumulators: 811 8601.10.00 Powered from an external source of electricity 811 8601.20.00 Powered by electric accumulators - 8602 Other rail locomotives 106.316.184 8602.10.00 Diesel-electric locomotives 103.702.456 8602.90.00 Other 2.613.728 8603 Self-propelled railway or tramway coaches, vans and trucks, other than those of heading 8604: 13.259.381 8603.10.00 Powered from an external source of electricity 13.251.659 8603.90.00 Other 7.722 8604 Railway or tramway maintenance or service vehicles, whether or not self- propelled (for example, workshops, cranes, ballast tampers, trackliners, testing coaches and track inspection vehicles): 77.655.990 8604.00.10 Self-propelled, ballast tampers and track inspection vehicles 30.831.626 8604.00.90 Other 46.842.364 8605 Railway or tramway passenger coaches, not self-propelled; luggage vans, post office coaches and other special purpose railway or tramway coaches, not self- propelled (excluding those of heading 8604): 0 8605.00.10 Passenger coaches - 8605.00.90 Other - 8606 Railway or tramway goods vans and wagons, not self-propelled: 0 8606.10.00 Tank wagons and the like - 8606.20.00 Insulated or refrigerated vans and wagons, other than those of subheading - 8606.30.00 Self-discharging vans and wagons, other than those of subheading 8606.10 or 8606.20 - 8606.9 Other: 8606.91.00 Covered and closed - 8606.92.00 Open, with non-removable sides of a height exceeding 60 cm - 8606.99.00 Other - 8607 Parts of railway or tramway locomotives or rolling-stock: 43.774.562 8607.1 Bogies, bissel-bogies, axles and wheels, and parts thereof: 8607.11 Driving bogies and bissel-bogies: 8607.11.10 Bogies 238.829 8607.11.20 Bissel-bogies - 8607.12.00 Other bogies and bissel-bogies 2.934.985 8607.19 Other, including parts: 8607.19.1 Bearing boxes: 8607.19.11 Incorporating bearings, of a diameter exceeding 190 mm, of a kind used in railway 6.840.195
The Brazilian Market for Railway Technologies | 51 carriage wheel axles 8607.19.19 Other 1.223.680 8607.19.90 Other 5.592.487 8607.2 Brakes and parts thereof: 8607.21.00 Air brakes and parts thereof 6.374.998 8607.29.00 Other 4.549.689 8607.30.00 Hooks and other coupling devices, buffers, and parts thereof 3.169.007 8607.9 Other: 8607.91.00 Of locomotives 1.309.398 8607.99.00 Other 11.541.294 8608 Railway or tramway track fixtures and fittings; mechanical (including electro- mechanical) signalling, safety or traffic control equipment for railways, tram- ways, roads, inland waterways, parking facilities, port installations or airfields; parts of the foregoing: 7.309.402 8608.00.1 Mechanical (including electro-mechanical) signaling, safety or traffic control equipment for railways, tramways, roads, inland waterways, parking facilities, port installations or airfields:
8608.00.11 Mechanical 975.654 8608.00.12 Electro-mechanical 2.196.297 8608.00.90 Other 4.137.451 8609.0000 Containers (including containers for the transport of fluids) specially designed and equipped for carriage by one or more modes of transport 11.695.033 Source: Ministry of External Relations (Brazil Trade Net)
52 | The Brazilian Market for Railway Technologies
Please refer to Annex G for more detailed data regarding the dis- tinct categories of railway products, including information on import trends and the main countries of origin.
7.2 Import Duties.
As a member of Mercosur (together with Argentina, Uruguay and Paraguay, with Venezuela to join soon), Brazil has free trade relations with most Latin American countries. Mercosur has been reluctant to conclude free trade agreements outside the region, but currently negotiates such an agreement with the European Union. If the EU and Mercosur strike a deal, EFTA would probably want to follow suit. For the time being, however, there is no discrimination between Swiss suppliers and their major competitors.
The import costs include several expenses which may vary depending on the assumptions agreed on in the purchasing agreement. Key costs are: FOB value, material FCA, international freight (aerial or maritime), insurance, import duty (II), IPI, ICMS, storage, customs fees and bank charges.
There are various taxes that apply to products exported to Brazil at both the federal and State levels. At the federal level, Brazil imposes the Import Tax (Imposto de Importao - II), which varies according to the applicable NCM code. This tax is placed on products being imported from abroad in order to give an advantage to Brazilian-made goods. The percentage per product depends on various factors including country of origin and type of product and is calculated using the customs value.
The customs value includes cost, insurance, freight and other fees that the legislation specifies. The duty rates vary according to the classification of the product in the External Tariff Code (Tarifa Externa Comum - TEC).
It is important to note that the only certain way of knowing which NCM code and applicable tariffs to use is contacting the customs authorities of each country, either directly or through a consultant. The Brazilian organization responsible for this type of coding is Receita Federal (www.receita.fazenda.gov.br). To start the consul- tation process, technical brochures and other documents which may help Receita Federal identify the appropriate code should be sent in. It may take 30 days or more to receive an answer. The import duty (II) rates for the railway products applicable NCM codes are shown in Table 23.
The Brazilian Law allows for the reduction of import taxes (ex- tarifrio) every time a similar product / technology is not identified in the domestic market. There are lots of Brazilian companies offering rail tracks, sleepers and the like, but more advanced tech- nology is sometimes not available.
The Brazilian Market for Railway Technologies | 53
The ex-tarifrio regime, when approved, reduces the import duty of capital goods down to 2%. This reduction is only valid for the im- port duty, but as the other taxes are applied on a cascade effect, this benefit ends up reducing the whole importation significantly.
In order to eliminate the import tax of components that Brazil does not manufacture, Resolution 40 of CAMEX, passed 27/09/2010, includes seven rail part exceptions from the TEC List. CAMEXs Resolution 40 includes: Connecting rods; Cylinder, cylinder head and crankcases; Injectors (motor); Pistons; Cylinder heads for diesel motors; Crankshaft; Ball bearings for diesel motors.
More import duty breaks may be granted for other products. To apply for an ex-tarifrio, the company has to prove that there is no similar product locally produced. This will be proven by submitting technical information, catalogues and details on the product to the trade association related. If approved, the import duty is reduced for a period of 2 years, renewable (part of the process has to be done again, as the company will need to prove after 2 years that the domestic production is still inexistent for such item).
7.3 Taxes. In addition to the II, there is a federal VAT (Imposto sobre Produtos Industrializados - IPI) and state VAT (Imposto sobre Operaes relativas Circulao de Mercadorias e sobre Servios de Transporte Interestadual e Intermunicipal e de Comunicaes ICMS) on imported goods.
IPI is applied at varying levels to manufactured goods and is calculated regardless of the manufacturing location, whether inside or outside of the country. It is calculated based on how essential the product is, with non-essential products receiving the highest tax burden and those considered essential receiving, in some cases, a tax of 0%.
All products listed under NCM Chapter 86 are considered essential and thus taxed at 0% IPI.
ICMS is levied on the sum of the customs value, the II and IPI values, the import duty, the IPI tax and other customs charges. The duty ranges from 3.5% to 30%. If the imported goods are destined for manufacture or for sale in Brazil, the importer may recover the value of the IPI and ICMS taxes.
For imports coming into Rio de Janeiro, ICMS is 15% and in So Paulo, the tax is 18%. In the southern state of Rio Grande do Sul, a tax of 17% is levied. However, it is important to note that these taxes are issued by state governments and may fluctuate.
7.4 Import Procedures. Despite of some governments efforts to reduce the bureaucracy connected with importing and exporting, foreign companies may still find the procedures somewhat cumbersome. Brazilian customs agents also tend to be extremely formalistic. The use of a local customs agent remains essential when dealing with the peculiari- ties of the Brazilian customs authorities.
The Secretariat of Foreign Trade (Secretaria de Comrcio Exterior - SECEX), that is part of the Ministry of Development, Industry and Foreign Trade (Ministrio do Desenvolvimento, Indstria e Comrcio Exterior MDIC) controls imports and exports in Brazil. Companies engaged in foreign trade must register with the SE- CEX as importers or exporters.
Importers must obtain Import Licenses (Licena de Importao - LIs) from SECEX. Import Licenses may be obtained electronically by means of the Integrated Foreign Trade System (Sistema Inte- grado de Comrcio Exterior - SISCOMEX), which is an on-line computer register that processes all import licenses. Licenses normally are issued within five days of application. Goods must be loaded for shipment within 90 days of the issuance of the import licenses.
Importers must submit the following documents to the customs authorities:
The original trade invoice (Pro forma Invoice); Import Declaration - SISCOMEX issues an electronic receipt of collection of federal VAT; Document of collection of state VAT;
54 | The Brazilian Market for Railway Technologies
A document showing knowledge of the original freight or an equivalent document proving the property or the possession of the goods (bill of landing or airway of landing); Other documents that may be required in conformity with the regulations of international trade or other specific legislation such as a certificate of origin, quality and health certificates.
The possibility of duty reductions exist and depend on the charac- ter of the imported products, their destination, origin and value. The Brazilian government has also created tax-incentive pro- grams, which may benefit the importation of certain types of prod- ucts. To find out whether or not the possibility apllies to rail relate equipment the Federal Revenue (Receita Federal) should be consulted.
Two gross revenue taxes, the Social Integration Program Tax (Programa de Integraco Social - PIS) and the Social Security Financing Tax (Contribuio Social para Financiamento da Seguri- dade Social - COFINS) are levied at a combined rate of 3.65% on the sale of imported goods in the local market.
SECEX uses information from international commodities ex- changes, specialized publications, price lists of foreign producers, prices declared by importers and other means to evaluate prices of imports and exports. The Brazilian authorities exercise control over import and export prices and investigate cases in which they sus- pect dumping may have occurred.
Importers should document their declared prices either via interna- tional commodities exchanges, specialized publications or price lists of foreign producers. Other alternatives are pro forma invoic- es, letters, facsimiles, telexes, orders or contracts.
The Brazilian Market for Railway Technologies | 55 8.1 Public Procurement. All federal, state, and municipal agencies and foundations, as well as all public companies, including those with private participation, are subject to the Tendering Law (Law No. 8666 of 12 June 1993). Companies with non-controlling state participation do not have to follow general procurement rules.
The Tendering Law mandates that all procurement of goods, works, and services must be tendered, with procurement based on best-price criteria. In practice, roughly 40% of procurement con- tracts take place under some kind of waiver from tendering re- quirements. There are frequent allegations of corruption.
Brazil is not a party to the WTO Plurilateral Agreement on Gov- ernment Procurement (GPA), nor does it intend to join anytime soon. Although in general national treatment is afforded to foreign suppliers legally established or represented in Brazil, preference may be given to goods and services produced in Brazil even when they are up to 25% more expensive. This is meant to spur national industrial development.
Suppliers must be legally established or represented in Brazil to qualify for government contracts; foreign firms not established in Brazil may only participate in international tenders designated as such. Projects wholly or partly financed by international financial institutions or cooperation agencies are tendered internationally, and may be governed by rules established by such institutions or agencies.
In the case of international tenders, the bidding object may be executed in a foreign country and the price proposals established in foreign currency, but the foreign company still needs legal re- presentation in the country (with express powers to receive notifi- cations and respond administratively and judicially) or a joint- venture with a Brazilian firm (at least 51% Brazilian capital partici- pation and operational control by Brazilian nationals).
Apart from their legal status, companies usually need to demon- strate their financial and technical capacity in order to qualify as bidders. In international bids, a foreign companys offer must in- clude taxes that would normally only be charged of national con- tractors. This provision is meant to ensure equal conditions among bidders.
For engineering works and services, in particular, foreign firms must comply with legal requirements related to the engineering profession. These requirements comprise the registration, in the Regional Council of Engineers and Architects (CREA), of: (a) the company; (b) the professional engineer; and (c) the collection of technical works. Foreign companies may have their qualification recognized by Brazilian competent authorities. In order to acquire such qualification they must present technical justifications such as certificates, titles, published works, among others, authenticated by the respective consulate and translated by a certified translator.
All public tenders are made public through the Official Gazette (Dirio Oficial da Unio) and different internet sites.
Bids for line extensions are generally submitted by partnerships (consortia) of construction companies, engineering firms, and rolling stock manufacturers. This kind of partnership may involve many companies and a lot of auxiliary supplier partners. The win- ning consortium may sub-contract other suppliers and service providers.
Large projects are usually divided into several lots and awarded to different consortia.
8.2 Procurement by Private Companies. While state-owned transport companies (e.g. most subway and passenger service operators) use the public tender system to award contracts for line extensions, new equipment and mainten- ance, private railway operators have their own systems and inter- nal regulations for qualifying suppliers and service providers. These are governed by civil law.
MRS Logstica, for instance, buys directly from suppliers. They maintain direct contact with suppliers handling import processes. MRS requires a complete registration with a procurement analyst from the company before guaranteeing the suppliers inclusion into the database.
FTC requires company registration documents (national and state registration), and technical / commercial information, such as if the supplier has ISO certification or other quality certificates and commercial references and experience in the sector. Other evalua- 8. Selling Rail Products in Brazil.
56 | The Brazilian Market for Railway Technologies
tions are performed during the material supplying process, such as the payment method, delivery deadline, type of freight, etc.
Metr Rios new supplier registration procedures may vary de- pending on the transaction characteristics. A presentation to the technical and supplies department of the company is essential. During the process, technical assistance is an important subject, and prototypes and samples are always welcome.
In the case of line extensions, equipment is usually selected and acquired indirectly, through a general contractor, while replace- ments of equipment are usually acquired directly from the manu- facturer.
When Metr Rio has to choose between different proposals, it will consider the acquisition volume, the value, and the existence of a similar national product. Metr Rio is concerned about the conti- nuity of the supplying contract, specially with regard to imported units. If this is the case, a national manufacturer will be chosen over an international manufacturer.
SuperVia has no restrictions regarding imported equipment (its infrastructure, however, belongs to the state). In fact, this conces- sionaire recently purchased 23 South-Korean EMUs, 4 car com- positions, and also some Chinese trains. Apparently there are no restrictions on purchasing spare parts from a company of a differ- ent nationality than the original supplier.
Generally speaking, Brazilian railway operators do not have local content requirements. Every national company contacted to clarify this mentioned that the sector does not require any share of local content when purchasing. However, when the project is financed by the BNDES, 60% of local content is usually required to release the funds. The BNDES is expected to finance almost half of the total investments in the sector in the near future.
8.3 Technical Standards. Brazilian railway operators may choose whichever standard they would like to require from their suppliers. Most of them follow pre- established international standards, predominantly AAR (American Association of Railroads) and less frequently European UIC (Union International des Chemins de Fer) standards.
The fact that each operator company opens a bid in accordance with its own technical specifications is considered to be a problem for the metro-rail sector in Brazil, especially for the development of a national rail suppliers industry. An integrated effort to correct this situation is therefore under way.
The effort is led by the Brazilian Association of Technical Stan- dards (Associao Brasileira de Normas Tcnicas ABNT), which has created a Study Committee (Metro-Rail Transport Standards Committee CB-06) to regulate rail related products and compo- nents. The Interstate Industrial Association for Railway and Road Materials and Equipments (Simefre, cf. Chapter 2.4.7.) runs the Committee. In association with related companies, railroad opera- tors and technicians involved in the sector, it studies and reviews all previous technical standards.
The following Normative Study Sub-Committees are currently in operation:
SCB-06:100 Permanent Way (Via Permanente)
CE-06:100.01 Sleepers and Ballast Study Committee (Com- isso de Estudo de Dormentes e Lastros) The committee works in the scope of standardization in the fields of concrete, steel and wood sleepers and ballasts re- garding terminology, classification, requirements and test me- thods.
CE-22:00 CE-06:100.02 - Rails and Fittings Study Committee (Comisso de Estudo de Trilhos e Fixaes) The committee works in the scope of standardization in the field of bearing plates, rails and fishplates regarding the clas- sification, requirements and test methods.
CE-06:100.03 Turnout Systems and Crossing Study Com- mittee (Comisso de Estudo de AMV e Cruzamentos) The committee works in the scope of standardization in the field of turnout systems apparatus and crossings used in subways and railways regarding terminology, classification, requirements and test methods.
CE-06:100.04 Track and Infrastructure Study Commmittee (Comisso de Estudo de Traado e Infra-Estrutura) The committee works in the scope of standardization in the field of crossings, level crossing, crossing over and under the
The Brazilian Market for Railway Technologies | 57 railroad, fixtures, equipment, project design and interference regarding terminology, classification, requirements and test methods.
SCB-06:300 Rolling Stock (Material Rodante)
CE-06:300.01 Wagons, Bogies, Couplers and Accessories Study Committee (Comisso de Estudo de Vages, Truques, Engates e Acessrios) The committee works in the scope of standardization in the field of wagons and other rail cars, their structures and com- ponents, bogies, couplers and accessories directly connected to the freight transport operation by railroad for terminology, requirements, test methods and generalities.
CE-06:300.04 - Wheels, Axles, Bearings and Wheel Sets Study Committee (Comisso de Estudo de Rodas, Eixos, Rolamentos e Rodeiros) The committee works in the scope of standardization in the field of wheels, axles, bearings and wheel set assembly for freight cars, passenger cars and locomotives when it comes to terminology, requirements, test methods and generalities.
SCB-06:400 Signaling, Telecommunications and Energy Power Supply Study Committee (Sinalizao, Telecomunicao e Energia)
CE-06:400.01 Signaling (Sinalizao) The committee works in the scope of standardization in the field of signaling regarding the electrical, electronics, tele- communications and embedded systems for terminology, classification, requirements, test methods and generalities.
The Study Committees that are already operating are those listed above, but due to the growing amount of investment in the sector, many other committees are planning to gauge technical standards. Listed below are other commissions about to be created, accord- ing to Simefre.
SCB-06:200 Brakes (Freios)
CE-06.200.01 Brake Shoe Study Committee (Comisso de Estudo de Sapatas e Sapatilhas)
CE-06:200.02 Brake Equipment Study Committee (Comisso de Estudo de Equipamentos de Freios)
CE-06.200.03 Braking Study Committee (Comisso de Estudo de Frenagem)
SCB-06:300 Rolling Stock (Material Rodante)
CE-06:300.02 Locomotives, Bogies, Couplers and Accessories Study Committee (Comisso de Estudo de Locomotivas, Truques, Engates e Acessrios)
CE-06:300.03 Passenger Coaches, Bogies, Couplers and Accessories Study Committee (Comisso de Estudo de Carros de Passageiros, Truques, Engates e Acessrios)
SCB-06:400 Signaling, Telecommunications and Energy Power Supply Study Committee (Sinalizao, Telecomunicao e Energia)
CE-06:400.02 Works in the scope of telecommunication (Telecomunicao)
SCB-06:500 General Studies (Estudos Gerais)
CE-06:500.01 Security Study Committee (Comisso de Estudo de Segurana)
CE-06:500.02 Ticketing Study Committee (Comisso de Estudo de Bilhetagem)
CE-06:500.03 Terminology Study Committee (Comisso de Estudo de Terminologia)
Many technical standards have been published since 1981. The entire list of technical standards and the corresponding titles are attached in Annex H.
Although these standards do not yet cover all the possible items involved, they are seen by the industry professionals as quite satisfactory. This goes especially for state-owned subway and train operators, as a small survey showed:
58 | The Brazilian Market for Railway Technologies
Metr Rio follows primarily ABNT standards and considers these specifications those that best fit their needs, although, in some cases, ABNT does not have the appropriate standards regarding specific components. In these cases, Metr Rio may require the products to fit UIC or AREMA standards.
CBTU mentioned UIC, AAR and ABNT, as some of the entities whose standards should be met. In some specific cases, CBTUs Rolling Stock Technical Manager, Mr. Srgio Lopes, said that ABNTs standards can be more rigorous than the other standards.
Mr. Luciano Gama de Lira from CBTU Macei said that the com- pany follows ABNT technical standards. The registration of suppli- ers is made through bids. All of these bids are made public through the Official Gazette (Dirio Oficial da Unio). Small local enterpris- es have governmental incentives and usually win these types of bids. Therefore, foreign companies have difficulties in winning those bids.
Mr. Oliveira from CBTU Joo Pessoa said that they work with several technical standards and federal regulations. They also work with ABNT, German and, American standards. The company is public, so it follows Law 8666/93 (Bidding Law).
Trensurb is also a federal government-owned company like CBTU. Their fleet was purchased two decades ago from a Japanese company, therefore, Trensurb prefers to use Japanese technical standards (JIS), whenever possible. Whenever Trensurb feels that JIS specifications are insufficient, they look to equivalent stardards issued by ABNT, Standard American Equivalent (SAE) and Deutsches Institut fur Normung (DIN).
According to SuperVias supplies specialist, Mr. Marcio Rodrigues, their requirements vary depending on the nature of the product or service. For the rolling stock they require the products to fit AAR standards, whereas in the case of permanent way components the products should meet AREMA standards.
The private company MRS has a clear distinction regarding the technical standards required. When it comes to permanent way, MRS follows AREMA standards and UIC standards, but on a smaller scale; when it comes to rolling stock, AAR is the most used standard. MRS believes that ABNT standards do not fully satisfy the sectors requirements due to their lack of a focus on the rail market.
8.4 Product Registration / Certification Requirements. There is no standard procedure for product registration and certifi- cation. The following information was also gathered from the con- tacts made.
Mr. Rodrigues from SuperVia said that every time the company is looking for components that the Brazilian market cannot provide, they come in contact with trading companies. He recommended sending catalogues and certificates, so that they can schedule a presentation.
Metr Rio has a specific department that evaluates the potential suppliers. As a private company, Metr Rio directly consults poten- tial suppliers. New supplier registration procedures may vary de- pending on the transition characteristics. A presentation should be held for the technical and supply departments of the company. During the process, technical assistance is an important subject, and prototypes and samples are always welcomed.
FTC referenced the ISO 9001 standard to ensure the products quality matches technical specifications. Among the technical criteria that the FTCs Planning Department Manager Mr. Celso Schurhoff mentioned was the purchase order, the products fact- sheet, the manufacturers handbook, and visual inspections when- ever necessary. Meeting deadlines is a fundamental aspect.
In order to proceed with the certification, Trensurb has an Equip- ment Nationalization Department that makes adjustments to the maintenance procedures and is responsible for the replacement of parts from industries other than the Japanese. According to their Coordinator Mr. Luis Eduardo Gonalves, their engineering team needs to verify that all suppliers understand the specifications required for each component needed. They need to comply with Law 8666 and their open bids can be found on the following web- site: www.licitacoes-e.com.br.
Engevixs executive Mr. Wilson Vieira emphasized that the local industry presents the necessary expertise to meet their require- ments. Therefore, they establish restrictions to foreign companies by not allowing them to participate in their purchasing processes, unless the domestic market cannot meet their demands.
The Brazilian Market for Railway Technologies | 59
For the vendors registration, a standard form can be found on CBTUs website (www.cbtu.gov.br). The company requires the compliance with Law 8666. The General Manager of CBTUs head office in Rio de Janeiro, Mr. Oswaldo Barroso Moss, mentioned that the company holds a bidding department that maintains a vendor list. However, Mr. Moss stressed that there is no distinction between registered companies and those that are not.
The Federal Government mandated that all purchases of goods and services common to the Federal Public Administration are to be made through bidding processes, especially in electronic form. Banco do Brasil runs the electronic bids. Vendors wishing to par- ticipate in electronic bids should register at any branch of their branches.
8.5 Finding a Distributor. All the traditional importing channels exist in the Brazilian market: distributors, import houses, trading companies, subsidiaries and branches of foreign firms among others.
Although some companies import directly from foreign manufac- turers without local representation, in most cases the presence of a local representative or distributor will prove to be very helpful. If after sales service is needed, a presence in Brazil becomes pre-re- quisite, as it gives the end-user confidence that technical assis- tance will be provided in time.
The companies interviewed for this report mentioned that a strong technical and commercial presence in the country, along with product quality, is one of their most important purchasing criteria.
A partnership with a local company is highly recommended when local and international competitors are already active in Brazil; in cases when there is a need for stock of spare parts or other inputs (as importing those last minute will be costly) and for products that require expertise in installation and technical support. In addition to this, it is likely that some of the local customers do not have Eng- lish or other foreign languages skills (particularly technicians), so having a local partner who can communicate and present your products in Portuguese can be an important asset.
As reported above, in the case of public tenders, suppliers must be legally established or represented in Brazil to qualify for govern- ment contracts. For this reason and others, foreign suppliers should look for a distributor or partner in Brazil.
As in any country, the recruiting of a local representation requires careful consideration. In general, larger companies will have sales offices throughout Brazil, which is a key element for companies seeking a countrywide presence. Smaller agents may have geo- graphical limitations. Ideally, the local partner will be close to the clients, usually in larger cities such as So Paulo, Rio de Janeiro, Curitiba, amongst others.
When selecting a local partner, it is also important to consider their existing contacts and connections to the industry as an important factor. Quite commonly, a potential partner might have limited English skills but excellent contacts and existing clients. Depend- ing on the negotiation and sales volume, the partner might even hire a new employee, fluent in English, to deal with the exporter.
Brazilian importers generally do not keep an inventory of capital equipment or raw materials. This is partly due to high imports and storage costs. Distributors keep inventories of components and spare parts in stock, which allows them to offer immediate technic- al assistance. This is highly appreciated by the customers to re- duce maintenance & replacement time.
Lawyers recommend that the exporter and representative have a written agreement / contract stating clearly the responsibilities of both parties. By having a written agreement, the exporter can limit his liability in case of any problems, the type of warranty can be established and trademarks can be protected. Usually a first re- presentation contract is signed for a period of 1 year (as a proba- tion period) and extended according to the interest of both parties.
It is up to the foreign company and the local partner to negotiate the type of partnership, whether it is exclusive or based on perfor- mance targets. Contracts are freely negotiable between parties as long as local laws are respected. If the exporter has already a standard contract used worldwide for their international repre- sentatives, it is highly recommended that a local lawyer in Brazil analyses and reviews it in view of the Brazilian legislation to avoid future problems or clauses that can not be applied in Brazil.
With Brazil on the spotlight, distributors and representatives are currently receiving many requests from international companies to
60 | The Brazilian Market for Railway Technologies
represent new brands, so it is important to approach the potential partners focusing on the USP (unique selling proposition) of the product and good persuasion arguments to motivate them to work with your product / solution.
Osec, with the support of the Swiss Business Hub Brazil, offers detailed consulting (Business Contact Checks) for Swiss compa- nies looking for a distributor in Brazil. The service extends from the compilation of a list of company addresses and their analysis to personal verification of the contacts according to the clients specific needs.
OSEC Mr. Thomas Foerst, Consultant South America Stampfenbachstrasse, 85 / Postfach 2407 8021 Zrich Tel. (direct): 044 365 54 71 E-mail: tfoerst@osec.ch www.osec.ch
SWISS BUSINESS HUB BRAZIL Mr. Martin Matter, Director Av. Paulista, 1754, 4 andar 01310-920 So Paulo SP Tel. +55 11 3372 8200 Fax: +55 11 3253 5716 E-mail: sbhbrazil@sao.rep.admin.ch www.osec.ch/sbhbrazil
The following is a list of distributors and commercial representa- tives of foreign companies in the railway segment.
BR RAIL PARTS Rua Professor Joo Soares Barcelos, 2230 sala 04 81670-080 Curitiba, PR Tel.: +55 41 3053-5049 www.brrailparts.com.br
BR Rail Parts manufactures parts for railway construction compa- nies. The company supplies steel rails, tie plates, fasteners, screws, spikes, washers, turn outs and a variety of specific prod- ucts.
BSSOLA COMRCIO E SERVIOS LTDA Av. Governador Carlos de Lima Cavalcante, 4632 Conj. 08 53040-000 Olinda, PE Tel.: +55 81 3431-6628 www.bussolape.com.br
Bssola Comrcio e Servios, located in the north-eastern part of Brazil, provides both products and services, proposing new solu- tions to the rail sector.
The company offers radiators for locomotive Alco-Bombardier, luminaries for electric multiple units (EMU), traction motors, quite a few parts for locomotives, rail dampers and several other imported pieces.
The companys main clients are the north-eastern Brazilian con- cessionaires CBTU Macei and Metr Recife.
CM EQUIPAMENTOS FERROVIRIOS Rua Bernardino de Campos, 588 Alto 13419-100 Piracicaba, SP Tel.: +55 19 3375-0403 www.equipamentosferroviarios.com.br
CM Equipamentos Ferrovirios main commercial representations are: Windhoff, Rosenbauer, Stahlberg Roensch and STRAIL.
Concerning permanent way, they offer: Vehicles for maintenance way (Windhoff) Rail Tools (Aldon) Monkeys and Tensor Rails (Simplex) Meter and Detector Trails (IEM) Hydraulic Encarriladores (Lukas) Plastic sleepers (ITS) Portable Machines (Melvelle) Level crossing floors (STRAIL)
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COMERCIAL FORTE Av. Nelson Palma Travassos, 893 City Empresarial Jaragu 02998-000 So Paulo, SP Tel.: +55 11 3944-1430 www.comercialforte.com.br
Comercial Forte offers track parts and accessories for distinct technical standards: DIN-536, AREA/1996, ASTM-A1, UIC-1986, ASTM-A759/85, DECAUVILLE and RI-NP4AM-PH37.
COMEXPORT Av. Das Naes Unidas, 10989 12andar 04578-000 So Paulo, SP Tel.: +55 11 2162-1888 www.comexport.com.br
The company has been operating for twenty years in the areas of exploration and development of products adapted to the demands of the Brazilian railway industry. Concerning the rail segment, they offer products mainly from China.
MJL COMRCIO E REPRESENTAO DE EQUIPAMENTOS FERROVIRIOS Rua Rolndia, 142 - Jaguar 05337-070 So Paulo, SP Tel.: +55 11 3714-6026 Fax: +55 11 3763-3456 E-mail: mjl.service@uol.com.br
Under the direction of Mr. Albert Blum, MJL represents several Swiss companies in the Brazilian market, including Stadler, HaslerRail and Scheron.
PANFER DISTRIBUIDOR Av. Brasil, 28088 - Realengo 21730-231 Rio de Janeiro, RJ Tel.: +55 21 2401-8060 www.panfer.com.br
Panfer is specialized in steel related products, and for the rail market, the company offers distinct kinds of tracks. The rail tracks Panfer commercializes are mainly TR tracks, Din standards and Decauville as well as TJ joints, base plates and several screws for fishplates and tirefonds.
STEMMANN INDSTRIA E COMRCIO LTDA Rodovia Marechal Rondon, km 133 - Tanque Seco 18540-000 Porto Feliz, SP Tel.: +55 15 3261 9190 www.stemmann.com.br
In the railway industry, the company represents Stemmann- Technik GmbH, offering the following products: Pantograph Ceiling for Electric locomotives and VLT Pantograph for 3rd rail subway Contact grounding Stinger system
8.6 Approaching Potential Customers. Suppliers should approach the decision-makers in the companies with a commercial and a technical solution. They will need some perseverance, too. At least two or three presentations are neces- sary before the negotiation moves forward. Ideally, equipment should be presented live on the spot. Personal contact and rela- tionships are key factors to consider when negotiating with Brazili- an businesspeople.
The technical personnel usually take part in purchasing decision- making processes, as they are concerned with the price and quali- ty of products. A failure to comply with pre-established technical specifications is said to be the most common reason for disqualifi- cation of foreign suppliers. It is therefore essential to communicate with engineers from the very start of a project.
The issue of price is crucial, too. When the purchase is made through tendering, in most cases the chosen proposal is the one that offers the lowest price.
The issue of deadlines is also of some concern. Because of the shipping distance and Brazils lengthy customs procedures, it is doubtful that a foreign company not established in the country can
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respond to an order with the same speed as a company located in Brazil.
Deadlines and price are not the only issues in question, issues that could be copied by any well-structured foreign company. Addition- ally, the concessionaries that we contacted also mentioned the need for good post-sale technical support as well as engineering services. Concessionaries tend to prefer to buy from national manufacturers as long as they are not convinced that foreign companies will provide these services.
Apart from issues concerning price, time and technical support, it is essential to bear in mind that the railway sector in Brazil is known for its preference of experienced companies over new players. A great deal of importance is given to dealing with well known companies that have a good reputation. Trust and confi- dence in the supplier is fundamentally important when purchasing railway equipment.
The main cargo operators interviewed for this research mentioned that they are looking for long term partnerships with companies that are willing to cooperate in developing solutions for their prob- lems and bottlenecks and provide a reliable product / service fitting their specific needs.