Friday, 26th November 2010 by Clare Bolton

The Brazilian government might yet bow to pressure from international consortiums to delay Monday′s bidding process for the high-speed rail link between Rio de Janeiro and São Paulo, says Jose Virgilio Lopes Enei of Machado, Meyer Sendacz e Opice Advogados, co-chair of Latin Lawyer′s Project Finance and Infrastructure Conference.

Despite reports in yesterday′s Estado de São Paulo from Helio Mauro Franca, executive superintendent of transportation agency ANTT, that the Monday deadline won′t be changed, Enei – who is moderating a panel on this topic at the conference in São Paulo on 9 December – says that the significant reluctance of the foreign companies to take part under the current structure might yet prove decisive.

′The general perception is that the bidding terms allocated excessive risks to the private parties,′ explains Enei. ′Yesterday, the French consortium sent an official letter to the government informing that it would not present a bid if the deadline was not extended. They argue that the project is very complex and challenging, and they would need more time to complete their assessment.′

The Spanish consortium have also made a formal postponement request, but it is not clear whether this is a condition of their participation. While the other potential bidders – from China, Germany, Korea, and Japan - have remained quieter, they have also not confirmed they will take part under the current deadline and financial terms. Brazilian companies cannot participate independently as none hold the necessary high-speed technology.

The government has committed national development bank BNDES to providing 20 billion reais (US$11.8 billion) of financing to build the train. Yesterday′s Folha de São Paulo reports ANTT president Bernardo Figueiredo as saying that the requests to delay aren′t meant to resolve technical questions but to pressure the government for more financing.

′If I had to bet, I would bet that the bidding procedure will be postponed by the government, despite its wish to move quickly, because it would not be politically wise to run the risk of a frustrated bidding procedure; one in which no bidder shows up,′ explains Enei. ′It would also be frustrating for the government if only one bidder makes a proposal, as there would be no comparison basis to conclude whether the single bid was competitive and feasible or not.′

He also noted that the matter would be clear in time for a full and fruitful discussion at the Infrastructure & Project Finance Conference on 9 December. In his panel on this and other opportunities in Brazil′s railway sector he is joined by Kent Rowey of Freshfields Bruckhaus Deringer LLP, Floriano de Azevedo Marques of construction company Manesco, and Sergio Avelleda, CEO of Companhia Paulista de Trens Metropolitanos.

Places are still available at the conference – click here to register. Please contact our This email address is being protected from spambots. You need JavaScript enabled to view it. with any queries.

(Latin Lawyer 26.11.2010)

 (Notícia na Íntegra)