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July 15, 2020

Numerous Infrastructure Projects in Mato Grosso moving Forward

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Brazilian Minister of Infrastructure, Tarcisio Freitas, recently met with the Governor of Mato Grosso, Mauro Mendes, to discuss progress on a number of infrastructure projects in the state including highway upgrades and railroad construction. The project that can get underway the quickest is the upgrading the northern half of Highway BR-163 within the state of Mato Grosso from a two-lane highway into a four-lane limited access highway.

Highway BR-163, which is commonly called the "Soybean Highway," is probably the most important highway in Brazil as far as grain transportation is concerned because it is the main north-south highway running through the heart of Mato Grosso, which is Brazil's largest grain producing state. The project is years behind schedule because the company that won the bid to complete the upgrade declared that they do not have the financial wherewithal to complete the project.

Even though the company has been collecting tolls on the highway for a number of years, they have done little work on the project other than building toll booths between the capital of Cuiaba and the city of Sinop in northern Mato Grosso, which is a distance of about 500 kilometers. The state of Mato Grosso took the company to court claiming breach of contract. The company has countered with a new proposal and it is now in the hands of the judicial system and the National Land Transportation Ministry if the new proposal will be accepted and if work will start.

The governor was assured by the Minister of Infrastructure that there will be a resolution to this problem one way or another and that work on the project will be started as soon as possible.

The discussions also involved turning the northern section of BR-163 from northern Mato Grosso to the Amazon River into a toll road operated by a private company. The final paving of BR-163 was completed last year by the Brazilian army, so they can now accept bids from companies wishing to operate the highway as a toll road.

The Governor and the Minister also discussed the completion of Highway BR-158 in northeastern Mato Grosso that has been stalled for years because of opposition from indigenous groups due to the fact that the highway was scheduled to pass through their reserve. To solve the problem, the government has decided to reroute the highway outside of the indigenous reserve.

They also discussed three railroad projects in the state including: the Ferrograo Railroad (Grain Railroad) between the city of Sinop in northern Mato Grosso and the Port of Miritituba on the Amazon River, the Fico Railroad (Center-West Railroad) between the state of Goias and the city of Lucas do Rio Verde in Mato Grosso, and the extension of the Ferronorte Railroad (North Railroad) from the city of Rondonopolis in southeastern Mato Grosso to the state capital of Cuiaba and then northward into central Mat Grosso.

The approximate timing of these projects are the following:

  • BR-163 - upgrading 2-lanes into 4-lanes within the state of Mato Grosso, work will start as soon as possible, probably be early next year.
  • BR-163 - converting the northern section between Mato Grosso and the Amazon River into toll road, bidding second half of 2020.
  • BR-158 - northeastern Mato Grosso, bidding second half of 2020, work will start as soon as possible.
  • Ferrograo Railroad - between the city of Sinop in northern Mato Grosso and the Amazon River port of Miritituba, bidding in early 2021 and work to start in 2021.
  • Fico Railroad - east-west railroad between the state of Goias and city of Locus do Rio Verde in Mato Grosso, bidding late 2020 and work to start early 2021.
  • Ferronorte Railroad Extension - extending the existing railroad northwest from the city of Rondonopolis to the state capital of Cuiaba, Rumo already doing preliminary work.

The Covid-19 pandemic has added a level of uncertainty to all of these projects. The Brazilian GDP will decline significantly in 2020 and it remains to be seen if all the promised funding for these projects will remain in place.