Brazil is set to push ahead with various logistics projects in 2022, as new contracts attract investors eager to cash in on the country's commodity export boom.
All the projects are aimed at improving Brazil´s infrastructure to move cargoes ranging from soybean to corn and iron ore across the country and facilitate exports by expanding the highway network, building railroads and expanding port capacity. These are mostly long term projects that will take years to reach completion.
For 2022, four concessionary contracts are expected to be signed by the fourth quarter for handling and storage terminals, three at the Port of Paranagua, in the southern region, and one at the Port of Santos, in the southeast. Both are key ports for grain exports.
The country also expects to sign a concession contract for the BR-163/230/MT/PA highway, a stretch of road that goes from Sinop, in Mato Grosso state —– Brazil's largest grains and oilseeds producing state — to Miritituba, in Para state. The system covers a 1,010km length, integrating the center-west with the north of Brazil.
Another concession project for the BR-364/RO/MT highway would link Comodoro, in Mato Grosso, to Porto Velho, in Rondonia state, where grains from the producing area in Mato Grosso are transported. The project aims to avoid the area becoming a bottleneck with the expansion of big agribusiness by reducing costs and travel time between the two areas.
Significant interest, spending
Brazil's infrastructure minister Tarcísio Gomes de Freitas said in October after an investors´ meeting that some projects had aroused a lot of interest. "It is a harbinger that we will have very successful auctions over the next year," he said.
The federal government expects to have secured nearly R250bn ($44bn) in logistics investment in the three years through the end of 2022.
The state of Sao Paulo plans to renovate 745km of roads over the next year. Work began in December 2021 and will be finished in 2022. That R521mn investment will facilitate transportation of regional agricultural products.
Another ongoing project that awaits further development is the Ferrograo railroad, with tender and contract phases expected in the first half of 2022. It will connect the center-west region, a major corn and soybean producer, to the port of Miritituba, allocating a great portion of the volume transported along the BR-163 highway corridor.
Construction of the center-west integration railroad (Fico) was initiated in September in Mato Grosso state. It will connect to the North-South railroad, which will connect the ports of Itaqui, in Maranhao state, and Santos, in Sao Paulo state.
Once completed,these new transportation routes will facilitate the flow of grains and oilseeds to ports both to the north and south, reducing logistics costs.
Currently awaiting evaluation with Brazil's environmental protection agency, the Nova Ferroeste railroad project plans to connect the state of Mato Grosso do Sul to the port of Paranagua, in Parana, becoming a cost-reducing alternative to increase the competitiveness of Brazilian produce on the international market.
Plans for the leasing of the port of Santana have also advanced, with the signing of a 25-year contract by the group Caramuru still pending. The investment will lower costs of transportation, as most of the volumes today are exported through the port of Santos, which is significantly further away for center-west producers than Santana.
In 2021, Brazil created the new legal framework for railroads to modernize the sector. The main change in this law is the possibility for railroads towork in an authorization modewith less state intervention, passing the risk, construction, and operational investments to interested companies.
