August 05, 2016

São Paulo plans metro privatisation

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THE governor of the Brazilian state of São Paulo, Mr Geraldo Alckmin, says he wants to privatise six of the nine existing or planned metro and monorail lines serving the city of São Paulo, which represents about 60% of the network.

The state is considering privatisation through operating concessions or public private partnerships (PPPs) because it is struggling to maintain the existing network and fund expansion of the system. Last year the state government failed to pay Reais 66m ($US 20.9m) of the Reais 330m it owed to Metro São Paulo for discounted concessionary travel.

Under Alckmin’s proposals, 84.6km of the 141.6km metro and monorail network would pass to private sector management, leaving Metro São Paulo with only lines 1, 2, and 3.

The city is already using PPPs, and Line 4 was the first in the city to be constructed and operated on this basis.

An operating concession is proposed for Line 5, which is due to be extended to an interchange with Line 2 at Chácara Klabin by 2018.

The 13.5km Line 6 from Brasilândia to São Joaquim is being constructed by the Move São Paulo consortium under a Reais 9.6bn 25-year build-operate PPP concession awarded by the state government in November 2013. Commercial operations are due to start in 2020.

The operation of monorail lines 15 and 17 will pass to the private sector and a concession for the operation of Line 18 was signed last year.

Tendering for the first concession is expected to begin before the end of the year and this contract will encompass both metro Line 5 and monorail Line 17.

The concession has already been approved by the state’s privatisation authority and six companies have expressed an interest in bidding. A preferred bidder is due to be announced early next year.

A 30-day public consultation on the privatisation plans will be held within the next few months.

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