Tax exemptions aid in financing Brazilian railway projects

The Federal Ministry of Transportation of Brazil has announced that a number of privately financed railway projects will be eligible for tax exemptions under the REIDI program, aimed at encouraging infrastructure investments, reports the Railway Supply portal citing Railway Gazette.

Details of the qualifying projects were published in the Official Gazette at the end of April.

Three projects are being advanced by Petrocity Ferrovias Ltda, a subsidiary of the industrial group Petrocity Portos SA. The most ambitious among them is the Estrada de Ferro Juscelino Kubitschek, with a value of BRL 14.2 billion, intended to connect Santa Maria, located south of the capital Brasília, to São Mateus in Espírito Santo on the South Atlantic coast. The 1,310 km line, named after the former president of Brazil, received approval from ANTT in 2021 under the Pro Trilhos program of the Bolsonaro government.

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Petrocity also plans to develop a 242 km line from Barra de São Francisco in Espírito Santo to Ipatinga in Minas Gerais and a 530 km route, Planalto Centro, from Campos Verdes in Goiás to Unaí in Minas Gerais.

Mining group Vale expects the tax benefits to allow it to continue various improvement projects for the 1,000 mm gauge Estrado de Ferro Vitória a Minas and the 1,600 mm gauge Estrado de Ferro Carajás.

Cellulose and paper company Suzano will be able to utilize the scheme to enhance the flow of cellulose from the manufacturing plant to the port of Santos. In January, Suzano received approval from ANTT, the National Land Transport Agency, to spend nearly BRL 1.3 billion on constructing a 136 km line from the pulp mills in Três Lagoas to Aparecida do Taboado under a 99-year concession.

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