Brazil’s bullet train bogged down in bureaucracy

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.

INFRASTRUCTURE WOES

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.

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