Brazil revives bullet train

By Denise Luna

RIO DE JANEIRO, April 4 (Reuters) - Brazil's government, confronting chaos in domestic air travel, is dusting off plans to have a high-speed train line built between the country's two biggest cities, Sao Paulo and Rio de Janeiro, officials say.

The project, which should cost over $6 billion and take at least five years to complete, has already attracted the interest of local and foreign firms. The train line should allow travel from one megalopolis to another in less than an hour and a half, compared with about an hour by plane and six hours by bus. The two cities are about 256 miles (430 km) apart.

The plan is gaining importance on the Transport Ministry's agenda at a time when air traffic controllers' strikes are affecting air travel, including the busy Rio-to-Sao Paulo route.

A source close to Transport Minister Alfredo Nascimento said a viability study prepared last year pointed to the need for an international tender for a concession to build and operate such a line.

"The project cannot be done at the public expense," the source said, adding Nascimento was "an enthusiast" of the bullet train idea, which would put Brazil in line with a global trend.

On Tuesday, a French bullet train set the world railway speed record of 357 mph (574.8 kph), drawing attention to a travel sector growing in many countries and rivaling air travel.

Brazil has few -- mainly cargo -- railroads, and transports passengers mostly by bus. It nurtured plans for its own bullet train in the 1990s, but a string of economic crises emptied government coffers and slashed Brazilians' travel budgets.

The only passenger railway route between the two cities, the so-called Silver Train, went bust in 1998. It made its only profit in 1996, after an air crash in Sao Paulo killed about 100 people, causing more passengers to travel by land.

FOREIGNERS INTERESTED

During last week's visit by Italian Prime Minister Romano Prodi to Brazil, Italian firm Impregilo (IPGI.MI) signed a letter of intent with Brazilian industrial group Odebrecht to study its participation in the project, Odebrecht said.

"Impregilo has preliminary studies on the subject, the agreement is to start joint studies," an Odebrecht spokesman said. Impregilo representatives in Brazil were not immediately available for comment.

The Transport Ministry source said Japanese, Chinese and South Korean firms had been showing interest in the project. Government-controlled infrastructure company Valec is coordinating the process and will present the findings of last year's study to the minister.

The project envisages a train with a top speed of about 168 mph (270 kph) and intervals of 15 minutes between trains. A one-way ticket would cost an estimated $80, slightly less than an air ticket, but far beyond the reach of many in Brazil, where the minimum wage is about $186 a month.

Brazil's National Economic and Social Development Bank said it expected to get requests from private firms for funding the train project, but would not become a partner in it.