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June 20, 2017

Process Started to complete Brazil's North-South Railroad

The Brazilian government announced last week that they are prepared to auction off the right to construct the southern and final leg of the North-South railroad in central Brazil. The section would extend 1,537 kilometers from Porto National in the state of Tocantins southward to Estrela D'Oeste in the state of Sao Paulo.

The National Land Transportation Agency (ANTT) announced last week that public hearings will be held over the next few months and the bidding process would take place in early 2018. The technical studies are complete and they will be presented in a series of public meetings between June 23 and August 9 in Palmas, (Tocantins), Goiania (Goias), Sao Paulo (Sao Paulo), and Brasilia.

The North-South railroad is considered the backbone of the railroad system in Brazil and one of the principal routes for the transportation of agricultural products in Brazil. Once completed, it will bisect the heart of Brazil's agricultural production connecting northern Brazil and southeastern Brazil.

The northern terminus of the North-South railroad is the Port of Itaqui in the city of Sao Luis in the state of Maranhao. This deep water Atlantic Ocean port is Brazil's main port for the export of iron ore. Over the last several years, the port has been upgraded to export grain as well. Once all the grain facilities are up and operating at full capacity, the port could rival the Port of Paranagua as Brazil's second most important grain export facility. The grain exported out of the Port of Itaqui is produced in eastern Mato Grosso, Goias, and Tocantins.

Once the southern leg is completed, it would connect to the existing America Latina Logistica (ALL) Ferronorte railroad in western Sao Paulo. The ALL Ferronorte railroad connects Mato Grosso with the Port of Santos in southeastern Brazil, which is Brazil's largest grain export facility.

It is estimated that the initial volume of grain handled by the North-South railroad would be 1.2 million tons per year in 2017 increasing to 8 million tons by 2020 and topping out at 25.8 million tons per year.