October 27, 2017 / 8:41 PM / a year ago

China firms in talks to bid in Brazil's grain rail auction

RIO DE JANEIRO (Reuters) - A group of state-owned Chinese firms plan to form a consortium to bid in an auction for the right to build and operate a railroad known as Ferrogrão, Brazil’s secretary for the government’s public-private partnerships program, Adalberto Vasconcelos, said on Friday.

With 1,100 kilometers (683 miles), Ferrogrão will connect grain producing regions in Brazil’s center-west to the port of Miritituba, in the northern Pará state. The railroad is expected to be an alternative to BR-163 road, currently the only way to take grains from central Brazil to northern ports.

The project is estimated to demand 12.6 billion reais ($3.89 billion) in investments.

Vasconcelos said he was recently in China and was informed about the intention from certain Chinese companies to form a consortium to take part in the auction, scheduled for the first half of 2018. He did not name the prospective bidders.

“The Chinese are very interested in Ferrogrão,” he told Reuters, referring to state-owned enterprises in sectors such as cement and steel.

Reporting by Rodrigo Viga Gaier, writing by Marcelo Teixeira; Editing by Marguerita Choy

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