The first $65BI will be split between greenfield railroad tracks ($45BI) and the expansion of highway lanes ($20BI). Off this first $65BI, $40BI shall be invested in the next 5 years and $25$ in the following 25 years.
With PIL, the Brazilian government aimes the integration of the Brazilian commodity transportation system as Brazil is one of the world's largest commodity producers but has poor logistics to transport farm products from the bread basket states to the ports or to distribute throughout the country.
- Concessions will be awarded to the bidding consortium that offers the lowest toll fare. Tolls shall start to be charged upon conclusion of 10% of the project.
- Financing Conditions
- Interest: TJLP (long-term interest rate) + up to 1.5%
- Grace Period: up to 3 years
- Amortization: up to 20 years
- DFL: 65%-80%
The most important PIL feature in terms of railroads lays on the break-up of the Brazilian government railroads monopoly, which means that more than one company will be allowed to operate the same railroad system, which will drop tariffs down and certainly replace the Brazilian railroad system as a logistic alternative.
- P3 model for construction, operation and maintenance of the greenfield railroads;
- VALEC (a public-held company) buys the transportation full capacity;
- VALEC auctions the transportation full capacity to independent operators, concessionaires and/or own-cargo operators aiming tariff modicity for end users;
- Financing Conditions:
- Interest: TJLP + up to 1%
- Grace Period: up to 5 years
- Amortization: up to 25 years
- DFL: 65%-80%