* Train projected to cost $17 billion
* New auction to operate train to be held in Sept. 2013
* Builder to be chosen separately in 2014
By Anthony Boadle
BRASILIA, Dec 13 Brazil set more attractive and
less risky terms on Thursday to attract international bids to
operate a high-speed train between its two biggest cities after
an attempt last year found no takers.
The planned 350 km per hour (217 mile per hour) bullet train
will run between Rio de Janeiro, Sao Paulo and the fast-growing
adjacent city of Campinas by 2020, said Bernardo Figueiredo,
head of the government agency in charge of infrastructure
The government will shoulder more of the risk by raising to
45 percent from 30 percent the public stake in the consortium
that will design the high-speed system, provide the technology
and the trains for it, and operate it on a 40-year concession.
"It's a way of sharing the risk with the investor and making
the project more attractive," Figueiredo told a news conference.
The winner must invest an estimated 7.7 billion reais ($3.7
billion), offer economy class tickets of no more than 200 reais
($100) and guarantee that trains cover the 260 miles (420 km)
between Rio and Sao Paulo in no more than 99 minutes.
To qualify to bid, companies cannot have had a fatal
accident on an existing high-speed system they operate in the
past five years. That's down from the 10 years required earlier.
The new auction to pick the operating consortium will be
held on Sept. 9, 2013, at the Sao Paulo stock exchange Bovespa.
A second auction in 2014 will choose the engineering group
that will build the track, with a minimum investment of 27.3
billion reais, Figueiredo said.
President Dilma Rousseff has made the train between Sao
Paulo and Rio de Janeiro a top priority for her government
despite concerns over its high cost and doubts whether it will
ever be profitable.
German, French, Spanish, Japanese and South Korean builders
and high-speed train operators are expected to compete for the
project, which has long been coveted by foreign investors
seeking to cash in on Brazil's need to fix infrastructure
bottlenecks and prepare to host the 2016 Olympics and 2014 FIFA
World Cup soccer tournament.
The bullet train will have stations at three international
airports: Galeao in Rio de Janeiro, Guarulhos in Sao Paulo and
Viracopos in Campinas, Figueiredo said.
Among the companies expected to bid are Germany's Siemens AG
, France's Alstom, Canada's Bombardier Inc
, South Korea's Hyundai Corp and Japan's
Hitachi Construction Machinery Co Ltd and Mitsubishi
Critics argue the 260-miles (420 km) between the two
megacities is already amply served by commercial flights of less
than an hour and that Brazil's growing middle class is not big
enough to make a bullet train financially feasible.
Figueiredo, however, said the government estimates 40
million people will ride the bullet train in its first year,
with demand rising to 100 million passengers by the end of the
concession in 2060.
The government will pay for its part of the building costs
with fees the operator must pay to the state, set at minimum
70.31 reais for each kilometer traveled by the trains, totaling
more than 27 billion reais over the 40-year life of the
concession, he said.
The winner of the contract will be the bidder that offers
the highest fees to the government and a design that costs the
least to build, Figueiredo said.