Brazil delays bids for $16.4bn high-speed rail project

“Spanish and German groups have guaranteed they would bid for the rail project if given more time.”

The Brazilian government has postponed the bidding process for its BRL38bn ($16.4bn) high-speed rail project, which would link the country’s two largest cities, by at least one year.

The bidding process has been pushed back because there was only one confirmed consortium competing for the Sao Paulo-Rio de Janeiro high-speed rail project.

Brazil Transport Minister César Borges said that Spanish and German groups have guaranteed they would bid for the rail project if given more time.

“It’s better to have a competitive process with the greatest number of bidders possible,” Borges said.

According to analysts, the government preferred not to open itself to further criticism by awarding the rail project to the one bidder, as in June 2013 it faced massive protests against corruption and misuse of public money.

The only consortium ready to take part in the competition was comprised of French companies Alstom and SNCF Group.

Companies such as Germany’s Siemens, Spanish firms Construcciones y Auxiliar de Ferrocarriles (CAF) and Renfe have also showed interest in the project, according to Borges.

Brazil has already cancelled the previous tendering process in 2011 as there were no bids for the project.

According to reports, a Spanish consortium comprising Renfe and Talgo has asked for postponement of the process, to offer bids for the project.

The delay would also give French, Spanish and German groups time to better analyse the project and help in securing more bids from Japanese, Chinese and South Korean firms.

Despite the further delay, the government still expects to complete and start operations on the high-speed rail line by 2020.

Once operational, trains are planned to travel at speeds of around 350kmph between Sao Paulo and Rio de Janeiro, completing the journey in under two hours

In the first year of operation, the high-speed rail link is estimated to carry 40 million passengers, with demand expected to increase to about 100 million by the end of the concession in 2060.