Brazil postpones bullet train contract

Brazil has put off bidding for its ambitious high-speed train project, which will connect Rio de Janeiro and São Paulo, for at least one year after consortiums from Spain and Germany asked for the postponement.

Bernardo Figueiredo, the chairman of the state entity that will supervise the bidding, said the decision came after Brazilian authorities spoke with candidate consortiums from the three countries.

France’s Alstom SA and state-owned railway company SNCF Group already had a bid prepared but Spain “asked for more time,” while Germany requested that the process be “postponed for another year,” said Figueiredo at a news conference on Monday.

Friday was the deadline for the consortiums to submit their bids. The winner was to have been announced on September 19.

Spain has two consortiums participating. One is formed by state rail operator Renfe and track manager Adif, with the private firms of high-speed train maker Talgo, ACS, Indra, Elecnor, Abengoa, Thales, Bombardier and Dimetronic. The second group is headed by CAF, which has not released the names of its partners.

Siemens AG leads the German consortium.

Transport Minister César Borges said the 13-billion-euro project was still on track even though the bidding had been postponed. There are no plans to change the 511-kilometer route that will connect Brazil’s two biggest cities and the inauguration date is still set for 2020, he said.

The high-speed train, the first to be built in Latin America, will have stops in six cities and a branch line to the city of Campinas, northwest of São Paulo. This is the third time the Brazilian government has postponed awarding the project, which was first announced in 2007. It is part of a $100-billion investment plan by President Dilma Rousseff to upgrade Brazil’s roads, railways, airports and seaports through private concessions.

Spain’s Public Works Ministry hopes to repeat the success it had in 2011 when the government of Saudi Arabia awarded a multi-billion-euro contract to build an AVE line connecting Mecca with Medina.

Following the July 24 Alvia train accident in Santiago de Compostela – Spain’s worst rail tragedy in 40 years – concerns were raised on whether the incident would affect Spanish bids in Brazil. One of the conditions the Brazilian government set was that competing companies could not have had a rail accident on their records over the previous five years.

The cause of last month’s accident is being placed on the driver of the train who was speeding through a sharp curve when the cars derailed, killing 79 people and injuring more than 150 other passengers.