Brazil’s senate has approved provisionary measure 618 aimed at boosting the capital of federal rail company Valec by 15bn reais (US$6.83bn), government news service Agência Brasil reported.

The measure authorizes a credit grant to national development bank BNDES and the funds will be aimed at helping Valec honor upcoming commitments with railway concessionaires.

As it has been passed by the senate with no amendments, the measure does not have to return to the house of representatives. It will be forwarded directly to the president for approval, the report said.

VALEC TO BECOME EBF

To reduce logistics costs and bureaucracy and to better facilitate the transport of Brazilian goods, the government’s plan is to turn Valec into newly formed railways administrator Empresa Brasileira de Ferrovias (EBF).

The change will provide for a new railway concession model which involves a single license holder for railway uses rights, which will be EBF. The public rail company will be able to purchase and sell railway rights by closing contracts with logistics operators.

A total of some 100bn reais in railway concession tenders are being planned. With the first tender originally scheduled for October 28, federal audit court TCU is expecting delays.

Source: BNAmericas.com