Port of Santos could benefit from the São Paulo Rail Beltway, but project remains on hold

Ferroanel de São Paulo poderia ampliar a capacidade ferroviária de acesso ao Porto de Santos, mas não tem custo nem cronograma definidos (Alexsander Ferraz/AT)

Long regarded as one of the most important infrastructure projects to expand rail access capacity to the Port of Santos, the São Paulo Rail Beltway (Ferroanel de São Paulo) is still in a very early stage of development. The proposal is to build an approximately 53-kilometer railway bypass between Itaquaquecetuba (SP) and the Perus district in the city of São Paulo. The objective is to separate freight and passenger rail operations within the São Paulo Metropolitan Region.

The initiative has returned to the spotlight in recent weeks after the Ministry of Transport signed a memorandum of understanding with MRS Logística for the preparation of technical studies, including route analysis, operational capacity assessments, urban and environmental impact evaluations, land surveys, implementation scheduling, and preliminary estimates of investment requirements and expected benefits.

If the project moves forward, the implementation of the Rail Beltway could become an additional investment under the future concession of the Malha Oeste railway network, for which no bidding date has yet been established. Extending 1,625 kilometers, the railway connects Mairinque (SP) to Corumbá (MS), on the border with Bolivia, forming an important logistics corridor for freight transportation from Brazil's Central-West region. It connects to the Malha Paulista railway network, which provides access to the Port of Santos and enables the shipment of agricultural products, minerals, and other export cargo. Last week, the Fifth Amendment to the concession agreement was signed to ensure continued operations until the new concession is awarded.

The Ministry of Transport says there is still no implementation schedule for the Rail Beltway project. "Within the scope of the Malha Oeste concession project, the technical studies are expected to be completed within two years after the concession agreement is signed", the Ministry said in a statement.

According to the Ministry, there is also no definition regarding the implementation model, funding source, or project cost, as these decisions depend on the technical studies that will be carried out.

"The implementation of the Rail Beltway is planned as an additional investment under the Malha Oeste concession project, subject to the contractual provisions, including the preservation of the contract's economic and financial balance. The Malha Oeste concession project is currently under review by the competent authorities and may undergo adjustments during this process", the Ministry added.

In 2015, the then Empresa de Planejamento e Logística (EPL), now Infra S.A., participated in the environmental licensing process for the Northern Rail Beltway (Ferroanel Norte) and was responsible for preparing the Environmental Impact Assessment (EIA), the Environmental Impact Report (Rima), conducting the licensing process with Cetesb to obtain the preliminary environmental license, and carrying out the engineering studies for the project. "The work was completed and submitted to the then Ministry of Infrastructure during the first half of 2019", Infra S.A. said in a statement.

A future possibility?

The Agência Nacional de Transportes Terrestres (ANTT) explained in a statement that, should the Federal Government decide to proceed with the implementation of the São Paulo Rail Beltway, the future Malha Oeste concessionaire will be responsible for developing and submitting the preliminary engineering design for the railway section, subject to approval by the Granting Authority and an independent verifier.

"If the parties sign the amendment incorporating the project, the concessionaire will become directly responsible for implementing and operating the railway sections. To do so, it must fully comply with the guidelines established in the obligations handbook and the minimum technical specifications applicable to the line", ANTT stated.

No mandatory requirement

The Agência Nacional de Transportes Terrestres (ANTT) also clarified that construction of the Rail Beltway is not an automatic or immediate obligation under the Malha Oeste concession agreement.

"As an initial requirement, the concessionaire's only binding obligation is to deliver the technical study within 24 months. Construction works and the effective incorporation of the railway section into the concession will only become mandatory if the Granting Authority decides to proceed with the project, which may occur only after the third year of the concession and provided that a series of prior contractual and financial conditions have been fully satisfied", ANTT explained.