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Government Announces Investments for the Construction of Railway Facilities in Brazil

Due to the lack of capacity of Brazilian airports, the Federal Government and certain State Governments have decided to launch projects for the construction of railway facilities. Such facilities could be used as an alternative to air transportation services or as a form of developing the use of free capacity of airports that are not located in the centre of major Brazilian cities.

Traditionally, rail transportation facilities are used for the transportation of cargo. Passenger railway services are normally limited to urban zones in Brazil, the rendering of such services normally being undertaken by state-controlled companies. Nevertheless, in the light of the limitation of the capacity of the airports located in the centre of cities, the construction of railway facilities between a central point of major cities and airports located in the vicinities of such city appear to be an important and feasible alternative.

Such facilities could provide a fast and comfortable means of transport for passengers traveling to an from airport facilities and as such could be an important instrument for the reduction of the necessity of using airports in the centre of the major cities. The Government of the State of São Paulo recently announced the intention of building a railway facility between the centre of the City of São Paulo and the International Airport of the neighboring city of Guarulhos.

In addition, the São Paulo State Government has announced the commencement of the feasibility studies for the construction of railway facilities between the city of São Paulo and the City of Campinas, where the International Airport of Viracopos is located.

In turn, the Federal Government intends to launch by the end of this year a project to build a railroad facility for high speed trains between the cities of São Paulo and Rio de Janeiro, which could be used as an alternative to air transportation services between such cities.

Such projects shall be built by private entities upon the granting of regular concessions (in which the private entity receives compensation directly from the tariffs paid by the users), or by means of PPP (public-private partnerships) projects (in which the private entity receives compensation from the Government in addition to the tariffs paid by the users of the service).

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