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Procurement woes hamper Brazil high speed rail line

Procurement of Brazil’s beleaguered Rio de Janeiro to Sao Paulo high speed rail line has been hampered by a new delay, it emerged last week.

Brazil transport minister César Borges said the government remained committed to the country’s first high speed line despite admitting that the first phase of procurement was to be delayed by a year.

The delay is the latest to hit the scheme. Brazil’s National Transportation Agency reopened bidding last December on the £13bn line after it failed to attract firms to bid on the complicated contract structure.

Initially the concessionaire was to be given only 35 years to recoup costs from an anticipated six or seven years of construction.

Firms were reluctant to take on construction risks and the agency is now seeking bids from firms wanting to operate and maintain the 510km route. A winner was due to be selected in a blind auction this month. Construction work will be procured conventionally.

According to Borges, extending the deadline of the first phase by a year will bring greater assurance in the plans and more opportunities for additional foreign companies to participate in the process.

“We want the largest number of participants in the bidding process. We will not specify dates, however the deadline for the project is still 2020,” he said.

The postponement was said to be made due to requests from potential German and Spanish investors. The postponement is expected to affect the first phase of the bidding process.

The second phase of the bidding process, which includes the selection of companies that will be responsible for the project’s infrastructure, remains scheduled for 2015.

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