SAO PAULO, (Reuters) – Brazil’s ambitious drive to build a high-speed passenger railway linking its two biggest cities is a gamble to relieve the country’s road-dependent infrastructure — and a costly one that may fail.
A sleek, streamlined bullet train thundering its way between Sao Paulo and Rio de Janeiro at 280 kilometers per hour (174 miles per hour) is the image of modern and bullish Brazil that President Luiz Inacio Lula da Silva, who stands down in December after eight years in office, wants to project.
But the country will be judged on the execution of the venture, currently budgeted at a whopping 33.1 billion reais ($19 billion), while the winner of an auction to build the railway faces a challenging race against the clock before the 2014 World Cup and the Olympic Games in 2016.
“Like many transport projects here, the goal is political, rather than technical,” said Ronaldo Balassiano, a professor of transport engineering at Rio de Janeiro’s Federal University.
“I don’t see why Brazil should have a high-speed train when for the same price three or four fast lines could cover a greater area,” he added.
The government has already conceded the high-speed project won’t be completed in time for the 2014 World Cup, and Balassiano has doubts about the 2016 date as well.
Lula says the train and other massive projects are key for Latin America’s largest economy to sustain annual growth rates above 5 percent for the next decade. But a big impediment is Brazil’s aging infrastructure and the nation’s overreliance on road transportation, which for years has thwarted the development of alternative means of transport like railways.
Past public works, such as the partially-built ringroad that circles Sao Paulo’s metropolitan area, have fallen quickly behind schedule while going over budget and become bogged down in bureaucracy.
Between January 2007 and April 2010, only 46 percent of planned projects in Lula’s flagship infrastructure investment program, known as PAC, were completed, according to official data.
The auction winner will be announced in late 2010 and the execution of the project will be a test of Brazil’s ability to undertake the large-scale and ambitious construction projects that are needed for it to join the ranks of developed nations.
Brazil must overhaul its creaking transport system to slash production costs and make its exports more competitive globally. Credit ratings agency Standard and Poor’s said in February that the country would have to spend up to $500 billion by 2015 to plug infrastructure gaps.
Over the last three decades there has been little expansion of Brazil’s rail network, which has a total length of about 30,000 km (18,640 miles), a tenth of that in the United States.
The proposed 530-km (329-mile) rail connection is already two years behind schedule after surveyors submitted initial land studies late and the auction process was twice postponed.
The final cost of the massive plan is still an educated guess: according to the federal auditing council, known as TCU, less than 10 percent of the necessary data to gauge the real cost of the plan has been gathered.
“There has been a series of inconsistencies in the original studies,” lower house lawmaker Vanderlei Macris, the head of a congressional committee on the high-speed train, said in a telephone interview.
One aspect that worries analysts is whether the government and the winning consortium will be able to recoup all of the initial investment. The government would do well by considering experiences in other countries.
Three high-speed lines built in Japan in the 1990s have recovered less than two-thirds of real construction costs through ticket sales, according to a survey conducted by the U.S. Government Accountability Office.