the brazilian railways for the next decade - arema home · the brazilian railways for the next...

Sept

embe

r 29

–O

ctob

er 2

, 20

13In

dian

apol

is,

INSe

ptem

ber

29 –

Oct

ober

2,

2013

Indi

anap

olis

, IN

The

Braz

ilian

Rai

lway

s fo

r the

Nex

t Dec

ade

Eng.

Mar

celo

Per

rupa

to

Seni

or A

dviso

r - R

egio

n Am

eric

as

Deut

sche

Bah

n In

tern

atio

nal B

rasil

Ltd

a.

© AREMA 2013®1236

September 29 – October 2, 2013Indianapolis, IN


US$ 15 billion private investments since 1996 in railway’s upgrade and rolling stock

Much has been said about the resurgence of Railway Transport in Brazil, withconcessionaires’ investments since 1996 (US$ 15 billion) and the proposed expansion ofbroad gauge network (Law 11.772/2008).

1997 - 2012

Total Union

R$ 1,48 billion

Concessionaires´sInvestiments

Union´s Investments

2011 - 2012Total ConcessionairesR$ 4,901 bilhões

Total ConcessionairesR$ 33,476 bilhões

1997 - 2012

Concessionaires´sInvestiments in 2012

Growth of 66,64% whencompared to 2011.

Notes: 1) The year of 1997 contains the investments of 1996; Other values are currentSouces: Ministry of Transportation, DNIT and ANTF associates

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

412 386 538 617 766 668 1,089

1,958

3,114

2,221 12,597

4,173

2,499 92,941

4,596

4,901

162 113 45 56 58 56

35

8

44

72

140

225

123

112

142.7 87.5

4.9898

4.4.739

1.966

3.158

583 673824 724

1.124

4994574

12.293

2.737 2.622

4.398

3.053

Investiments in the Existent Railroads granted to Private Initiative(R$ Milhões)



117% growth in Rail Production (TKU) against 55,1% growth in National GDP

TKU Growth of 2,5%

GDP Grow of 0,9%

2011 - 2012

TKU Growth of117,0%

GDP Growth of 55,1%

1997 - 2012

Note: Index base 100.00 in 1997 Sources: ANTF e IBGE

Comparison of the Freight Rail Transportation X GDP

IND

EX



Today, however, the challenge is to reorganize the railway system, taking into account its multiplefunctions and its role in the socioeconomic development of the country, one of the top ten largesteconomies in the World.



Internal Market: Brazilian consumer market will be the fifth largest

in the world in 2020 Source: Exame Magazine and McKinsey Produced by: Ministry of Finance Global consumer market, in US$ trillion



Source: International Monetary Fund (IMF) Produced by: Ministry of Finance

Less exchange rate volatility Real effective exchange rate, percentage change from Jun/12 to Feb/13



Increasing external trade

Source: Ministry of Development, Industry and Foreign Trade (MDIC) Produced by: Ministry of Finance

Brazilian trade flow, in US$ billion

© AREMA 2013® 1237



Confidence: Foreign direct investment at high levels

Foreign direct investment, in US$ billions

Source: United Nations Conference on Trade and Development (UNCTAD) Produced by: Ministry of Finance



High demand for Brazilian bonds

Brazilian sovereign bond issuance yield and US Treasury* yield, 10 yrs, in % YoY Source

Source: Ministry of Finance and Bloomberg Produced by: Ministry of Finance



New macroeconomic framework to stimulate investment

MONETARY POLICY

Low interest rate: 7.25% EXCHANGE RATE POLICY

Floating exchange rates, with lower volatility FISCAL POLICY (US$ 23 bn. in 2012)

Tax cuts Payroll tax reduction (40 sectors) Reform of the Merchandise Circulation and Services Tax (ICMS) and

other taxes



Investment Plan Wide Gauge

It is not only the railroad being prepared to transport large bulk flows that should prevail in thedecisions of Brazilian society major leaders. Is the railroad in its broadest sense, leading the processof economic expansion and the mobility of people across the country.

Plan

Vila do CondeItaquí

Santarém

Suape

Vitória

SantosParanaguá

Rio Grande

Itajaí

Ilhéus

S. F. do Sul

RioItaguaí

Salvador/Aratu

Pecém/FortalezaManaus

Porto Velho

Marabá

Campos

Belo Horizonte

Corinto

São Paulo

Maracajú

Panorama

Estrela d Oeste

Lucas do R Verde

Campinorte

Mafra

Açailândia

MIDDLE SOUTH



Is the railroad as part of an integrated multimodal system with roads and waterways, targeted forlarge industrial conglomerates, connecting inland terminals and logistics platforms in ports, asproposed by the National Plan for Logistics and Transportation - PNLT since its first edition in 2008.

Itaqui

Ilheus

Salvador

Porto Velho

Santos

Vitória - Tubarão

Paranaguá São Francisco do Sul

Rio Grande

Miritituba

Santarém Itacoatiara

RailwaysPACPILWaterways

Ferrovia de Integração Centro-OesteUruaçu/GO – Lucas do Rio Verde/MT – Vilhena/RO

Prolongamento Norte da Ferrovia Norte-Sul

Ferrovia de Integração Oeste-LesteIlhéus/BA – Figueirópolis/TO

Ferrovia Norte-SulAnápolis/GO – Estrela d’ Oeste/SP b ãb ã

TAVCampinas/SP – Triângulo Mineiro

Adequação Linha Férrea de Barra Mansa/RJ

Ferroanel de São Paulo/SP

TAVCampinas/SP – Rio de Janeiro/RJ

Contorno de Araraquara/SP

TAVSão Paulo/SP – Curitiba/PR

Corredor Ferroviário de Santa Catarina/SC

Ferroban/FerronorteSantos/SP – Cuiabá/MT

Railway Corridors



Is the railroad system fed by a highway network, also targeted for large industrial conglomerates,connecting inland terminals and logistics platforms in ports, again as proposed by the NationalPlan for Logistics and Transportation - PNLT since its first edition in 2008.

BR-319/RO Contorno Norte de Porto Velho

BR-319/RO Ponte sobre Rio Madeira

BR-364/MT Construção

BR-163/MT Travessias Urbanas

BR-163/MT Adequação

BR-364/RO Travessias Urbanas

BR-364/MT Contorno norte de Cuiabá

BR-158/MT Construção

BR-262/MS Contorno de Campo Grande

BR-163/PA AdequaçãoBR-230/PA Construção de Acesso Rodoviário

BR-163/PA Pavimentação

BR-487/PR Contorno de Maringá

BR-163/PR Adequação

BR-163/PR Contorno de Cascavel

BR-163/SC Adequação

BR-480/SC Acesso a Chapecó

BR-158/RS Travessia de Santa Maria

BR-386/RS AdequaçãoBR-392/RS Adequação

Ponte, Contorno de Pelotas e Acesso ao Porto de Rio Grande

BR-470/SC Duplicação

BR-101/SC Via Expressa Itajaí

BR-277/PR Adequação Acesso Rodoviário

BR-153/PR Construção e Adequação

Rodoanel de São Paulo

BR-262/MG Travessia Urbana de Uberaba

BR-365/MG Adequação e Construção de Anel Rodoviário de Uberlândia

BR-050/MG Adequação Uberlândia – Araguari – Div GO/MG

BR-060/GO Adequação

BR-153/GO Contorno de Anápolis

BR-324/BA Porto de Salvador

BR-324/BA Porto de Aratu

BR-242/BA Contorno de Barreiras

BR-135/BA Construção

BR-135/PI Pavimentação

BR-135/MA Duplicação

BR-135/MA Adequação de Trecho Rodoviário

BR-153/TO Travessias

HighwaysPACPILWaterways

Itaqui

Ilheus

Salvador

Porto Velho

Santos

Vitória - Tubarão

Paranaguá

S. Francisco do Sul

Rio Grande

Miritituba

Santarém

Itacoatiara

Highway Corridors

© AREMA 2013®1238



And is the railroad as part of an integrated multimodal system with waterways, where feasible, alsoas proposed by the National Plan for Logistics and Transportation - PNLT since its first edition in2008.

Itaqui

Ilheus

Salvador

Porto Velho

Santos

Vitória - Tubarão

Paranaguá São Francisco do Sul

Rio Grande

Miritituba

Santarém Itacoatiara

WaterwaysPAC

Hidrovia do Madeira

Corredor do Tapajós

Hidrovia do Tocantins

Corredor Paraná-Tietê

Waterway Corridors



Period Mode of Transport Investment (R$ thousand) Modal Participation inTotal of Investments

2008-2011

Airports 6.456.161Total in PeriodRailways 43.875.672

Waterways 3.898.381Ports 21.391.328

140.691.229Highways 63.239.687Other 1.830.000

2012-2015



176.728.995Highways 41.848.775Other 8.087.940

After 2015



110.733.826Highways 19.323.135Other 34.568

Total Modal

Airports 22.458.511 5,25

Railways 201.986.293 47,18Waterways 18.330.775 4,28

Ports 51.014.142 11,91

Highways 124.411.597 29,06

Other 9.952.508 2,32

PNLT - The Investment Plan totals R$ 428 billion (~US$170 billion) giving priority to Railways (47%)



Investments in progress Railway Sector

Suape Suap

Figueirópolis

Uruaçu Caetité

Anápolis

Panorama

Palmas

Açailândia

Salgueiro

Pecém

Ilhéus

Santos

Alto Araguaia

Araguaína

Guaraí

Missão Velha

Dourados

Estrela d’Oeste

Itaqui

Rondonópolis Ilhéu

S t

Vilhena Barreiras

Porto Rio Grande

Cascavel

Cuiabá

Itajaí

Dionísio Cerqueira

Eliseu Martins Lucas do Rio Verde

Barcarena

Estreito

Porto Murtinho

Rio de Janeiro R

Resistência Argentina

Antofagasta Chile Campinas

Uberlândia

Belo Horizonte

Itajaíjj

Grande

Paranaguá ParanagCuritiba

Chapecó

Ferrovia de Integração Oeste-Leste

Ilhéus/BA-Barreiras/BA

Conexão Transnordestina/ Norte-Sul

Ferrovia de Integração Oeste-Leste – Barreiras/BA

– Figueirópolis/TO

Prolongamento Norte da Ferrovia Norte-Sul

Contorno de Araraquara/SP

TAV - Campinas/SP-Rio de Janeiro/RJ

uapeVariante de Camaçari-Aratu/BA

Adequação Linha Férrea Barra Mansa/RJ

Ferroanel de São Paulo

TAV Campinas/SP Triângulo/MG

TAV Campinas/SP-BH/MG

Contorno de São Francisco do Sul/SC

TAV São Paulo/SP-Curitiba/PR

Contorno de Joinville/SC

Ferrovia Nova Transnordestina

Ferrovia de Integração do Oeste

Ferrovia Norte-Sul Estrela d’Oeste/SP-Panorama/SP

Ferrovia de Integração do Centro-Oeste Uruaçu/GO-Lucas do Rio Verde/MT

Ferronorte Alto Araguaia/MT-Rondonópolis/MT

Corredor Ferroviário do Paraná

Corredor Ferroviário de Santa Catarina

Ferrovia Norte-Sul Panorama/SP-Chapecó/SC-Rio Grande/RS

Conexão da Norte-Sul com Ferrovia do Pantanal

Ferronorte Rondonópolis/MT – Cuiabá/MT

Ferrovia de Integração do Centro-Oeste Lucas do Rio Verde/MT-Vilhena/RO

Rebaixamento da Linha Férrea Maringá/PR

Corredor Ferroviário Bioceânico Paranaguá/PR-Antofagasta/Chile

FerroviaN orte-Sul – Trecho Sul Palmas-Anápolis

Work Studies & design Action accomplished Action Under way Under bidding Initial action PAC 1 concluded Existing lines Design & studies

Legend

Ferrovia Norte-Sul Ouro Verde/GO – Estrela d Oeste/SP



It is the railroad going deep into new territories, aswell as consolidating the production efficiency ofalready developed regions of the country.

But it is also the railroad building up the axles fornational and international South America integration.

Finally, it's the modern railroad serving the BrazilianXXI Century economy. This is the vision we have ofour freight rail and metro-rail systems. It is what weshould pursue with commitment and determination.



Fonte: Processamento PNLT, considerando consumo de energia

58

25

13

3,60,4

3035

29

51

0

10

20

30

40

50

60

2005 2015 2020 2025

HighwayRailwayWaterwayPipelineAirway

The National Plan for Logistics and Transportation – PNLT set up a 20 years Investment plan (2008-2023) which will change de brazilian transport matrix to a more efficient one in terms of energy, environment and costs .

Source: PNLT processing in terms of energy consumption



Benefits from the Transport Matrix change 2005 to 2023/2025

(Transport production from 851 to 1,510 bi TKU)

38% of energy efficiency increase

41% of fuel consumption reduction

32% of CO2 emission reduction

39% of NOx emission reduction

© AREMA 2013® 1239



The 2011 version of PNLT showed already an expressive growth in the rail participation for the transport matrix, against a reduction in

the road transport, due to investments in progress since 2008.

Source: PNLT 2011 Report

Figure 1: Modal distribution for regional freight transport matrix in 2011

Billion of TKU % distribution

Highway Railway Costal shipping Inland navig. Pipeline



The investment program covers not only the railway cargo transportation segment (Investment Programme in Logistics - PIL), but also the recovery sections dedicated to passenger transport in the old railway lines that extend over densely inhabited areas. Is the Regional Trains Program advancing through studies of Public Private Partnership - PPP.



Possible reductions in freight transport due to the

Investment Program in Logistics

The investments announced by the Federal Government for Railways, Highways and recently for Ports and Airports, totaling approximately R$ 230 billion, will significantly impact transportation costs, represented by the freight paid by the users.

Such investments will be concentrated in the next five years, extending, in total, over the next 20-25 years.



The analysis developed here for the cargo transport segment takes into account recent studies developed by the World Bank and the ILOS - Institute of Logistics and Supply Chain - ILOS, showing the margins of logistic costs reduction that Brazil has, provided that its transport matrix is adjusted to levels that lead to proximity to the U.S. (10.6% of GDP to 7.7% GDP).

The PNLT indicates the reduction target of road transport at the Brazilian transport matrix, from 58% to 30%, increasing the rail share to 35% and the waterways to 29% , by 2025.

The World Bank surveys indicate that Brazil, by rationalizing its transport matrix, would have a reduction gap of approximately 44% (approximately U.S. $ 46 billion / year) on its transport costs (freight expenditures). ILOS, by its turn, considers this percentage close to 24% (about $ 25 billion / year).

Reducing Logistics Costs in Brazil



Source: ILOS 2011

Percentage of Logistics Costs as related to GDP

Management

Storage

Stock Transport



Potential Logistic Costs Reduction in Brazil

Logistics Costs Comparisson

Present Logistics Cost / GDP (15%) US$ 124.3 billionPossible Logistics Cost / GDP (9%) US$ 72.7 billionGap for Cost Reduction (billion/year) US$ 51.6

Transportation (49%)Present Transportation Cost /GDP (9%) US$ 72.7 billionPossible Transportation Cost /GDP (5%) US$ 40.3 billionGap for Cost Reduction (billion/year) US$ 32.4 Inventories (42%)Present Inventory Cost /GDP (5%) US$ 40,3 billionPossible Inventory Cost /GDP (3.1%) US$ 25.0 billionGap for Cost Reduction (billion/year) US$ 15.3

Warehousing (5%)Present Storage Cost /GDP (0.9%) US$ 7.3 billionPossible Storage Cost / GDP (0.65) US$ 5.0 billionGap for Cost Reduction (billion/year) US$ 2.3

Administrative (4%)Present Administrative Cost / GDP (0.5%) US$ 4.0 billionPossible Administrative Cost /GDP (0.3%) US$ 2.4 billionGap for Cost Reduction (billion/year) US$ 1.6

Source: IBRD

© AREMA 2013®1240



The Ministry of Transport, through its medium and long term policy - associated to PNLT, works with the prospect of reducing annual costs of transportation (freight paid by the users) from the current 6.3% of GDP (R$ 250 billion/year) to 4.4% of GDP to the horizon of 2025. This means a reduction in freight costs of about 30%.

Of course, if Brazil is to organize its logistics to more efficient international levels, segments of the storage and management, and inventory costs, will also need to evolve to more appropriate levels, but all that depends on a diverse set of factors that lead to increased productivity and competitiveness in the global cycle of the economy, production and overall handling of transport flows.

Final Words



Some figures about Railways

Network Evolution in Railways

Passengers Evolution in Railways



Railway Network Expansion (km) no Brasil

PERIOD TOTAL BUILT/PERIOD ACUMULATED TOTAL

de 1854 a 1873 498 km 498 km

de 1874 a 1913 23.485 km 23.983 km

de 1914 a 1933 8.459 km 32.442 km

de 1934 a 1943 1.698 km 34.140 km

de 1944 a 1953 2.248 km 36.388 km

28



- 2,000 4,000 6,000 8,000

10,000 12,000 14,000 16,000 18,000 20,000

deze

ssei

s de

zeno

ve

vint

e e

dois

vi

nte

e ci

nco

vint

e e

oito

tr

inta

e u

m

trin

ta e

qua

tro

trin

ta e

sete

qu

aren

ta

quar

enta

e tr

ês

quar

enta

e se

is

quar

enta

e n

ove

cinq

uent

a e

dois

ci

nque

nta

e ci

nco

cinq

uent

a e

oito

se

ssen

ta e

um

se

ssen

ta e

qua

tro

sess

enta

e se

te

sete

nta

sete

nta

e tr

ês

sete

nta

e se

is

sete

nta

e no

ve

oite

nta

e do

is

oite

nta

e ci

nco

( tho

usan

d/ k

m )

1916

1985

Passengers Movement (1916 – 1984) Regional & Urban

Fonte: vfco.brazili.jor.br 29



Urban System/ Growth (+ 1.267%): 1984 – 180 million Passangers 2011 – 2,28 billion Passangers

Regional System /Growth (- 4.706%): 1962 – 200 million Passangers 2011 – 4,25 million Passangers

Passengers Movement (2011) Urbano

30



Vale-EFVM 24%

Vale-EFC 8%

Serra do Navio/AP

0%

Turistic

68%

Distribution (%)

Touristic Trains: • Rail lines extension grew 21% in 2011; • The 2015 forecast for demand growth is 65%, reaching

nearly 5 million passengers.

Passengers Movement (2012)

Existing lines Extension (Km)

Passangers/year (thousand)

Vale - EFVM 664 1.100

Vale - EFC 861 356

Serra do Navio 194 14

Turistic Trains 3.050

31

© AREMA 2013® 1241



Thank You

Eng. Marcelo Perrupato Senior Advisor - Region Americas Deutsche Bahn International Brasil Ltda.

© AREMA 2013®1242

the brazilian railways for the next decade - arema home · the brazilian railways for the next...

Documents