São Paulo Signs Rail MoU

Chinese Interest in Retenders

Authorities in São Paulo have signed a Memorandum of Understanding with China Railway Construction Corp. for three rail development projects in the Brazilian city.
The deal covers three privatization projects and is expected to spur breakbulk activity in the Southeast region of the country. It follows a trade visit by a Brazilian delegation to China, involving dozens of meetings with Chinese companies.

“We are very pleased with the results achieved during our first mission to China. We have signed important agreements with major Chinese companies in the areas of technology, education, health, agribusiness, sanitation, among others,” saiid João Doria, governor of São Paulo.

Metro Line 6, Campinas Intercity
Proposed development under the rail MoU includes retender of work for Metro Line 6 and São Paulo-Campinas intercity train line. Representatives of CRCC subsidiary CR20, signed an expression of interest to build new infrastructure as part of both retenders, as well as contributing to a clean-up project in the Pinheiros River.
The retender of the Metro project follows the termination of a previous public-private partnership contract with Concessionaria Move São Paulo due to difficulties obtaining long-term financing.
The three projects are expected to raise a combined US$4.6 billion, according to São Paulo government, with bids for Metro Line 6 expected to open this month and an auction for the intercity train likely to occur in the first quarter next year.

Chinese Investment Strengthens
The latest MoU is part of a wave of Chinese interest in the Brazilian rail sector, with a number of greenfield concessions reportedly close to securing funding from Chinese state-owned firms.
While the Chinese government has indicated its commitment to invest in Brazil the state will face competiton from a tleast four major investor groups when bids open, according to a statement from the  São Paulo state government.
CRCC is the second-largest construction and engineering company in the world by revenue. Based in Beijing, the firm is state-owned and employs more than 250,000 staff worldwide.