CG/LA Infrastructure's InfraBlog

Belo Horizonte plans PPP railway


PFI Issue 500 – March 13, 2013

Belo Horizonte is developing the Metropolitan Transportation on Rail project, or TREM, a US$2.9bn public-private partnership (PPP) with a 35-year concession. The infrastructure, equipment and assets will cost US$1bn and the operation US$1.9bn.

The state of Minas Gerais will provide a subsidy “according to performance”. The idea is to develop a mass transportation system for Belo Horizonte, the capital of Minas Gerais.

Under the plan, 330km (198 miles) of existing railways, mainly used for freight, will be redesigned for metropolitan and regional rail transportation. The system will be divided into three sections.

Line 1 will be 254.4km (152 miles) long, Line 2 78.3km (47 miles) and Line 3 181.5km (109 miles). The first two lines currently carry freight traffic, but there is no traffic on the third.

Belo Horizonte now has one rail line that carries about 200,000 passengers a day, while 800,000 passengers a day use buses. These three new rail lines, which would complement the existing one, would all go through heavily populated areas.

Line 1 would go through the centre of Belo Horizonte and the cities of Contagem and Betim, while Line 2 would go southwest and Line 3 south. Preliminary studies indicated about 120,000 passengers a day to start on the three lines and that could grow during the 35 years of the concession.

This rail plan is designed to shorten travel times, reduce accidents, improve competitiveness and lower carbon emissions.

The economic, technical and financial modelling is still under way. The plan is to have public consultation and pre-bidding in June 2013, the start of bidding a month later and the contract signing and the beginning of the concession in January 2014.

The Belo Horizonte metropolitan region, the third largest in Brazil after Sao Paulo and Rio de Janeiro, has more than 5m residents and GDP exceeds US$70bn. Minas Gerais is north of Rio de Janeiro state.

The TREM plan was unveiled at the recent CG/LA Global Infrastructure Leadership Forum in New York.
Alan Gersten
Latin America Reporter
Project Finance International
Reuters Professional Publishing
Thomson Reuters


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