Steer Davies Gleave supporting Brazilian Government in new model for railways

Steer Davies Gleave was appointed by VALEC-Engenharia, Construções e Ferrovias S.A. (VALEC), the Brazilian state-owned railway operator, to support the implementation of Brazil’s new open access model for its railway network.

Brazil is investing heavily in its rail network to support its national growth and productivity. As part of the investment the President determined that a new open access model, similar to that operating in Europe and Australia, should be developed to work alongside the existing vertical rail concessions. VALEC will have the role of purchasing capacity from the existing and new infrastructure concessions and selling it to new open access freight operators.

Steer Davies Gleave’s experts from the UK together with colleagues from our São Paulo office and UK Network Rail’s Director of Freight, Paul McMahon, were in Brazil last week to deliver a 5-day workshop for VALEC to present key components of an open access system and specifically the role of freight tariffs in supporting the Government’s objectives. We provided insight into comparisons with similar models elsewhere including from the UK, mainland Europe, Australasia and the Americas. Mike Goggin, the project director for Steer Davies Gleave said, “It is clear that the open access model in Brazil has great potential to support the country’s growth. Critical to that success is clearly establishing the open access arrangements and tariffs and we hope the workshop is a constructive first step in that process.” The workshop was also attended by Brazil’s Ministries of Transport and Finance, EPL and the land transport regulator ANTT.

Speaking at the end of the workshop Luiz Carlos de Almeida Júnior, Superintendente de Operações (Head of Operations) at VALEC said, “Steer Davies Gleave’s team provided us with an excellent 5-day workshop. We were impressed by the blend of skills and knowledge they were able to offer us with expertise in the economics of tariffs, numerous international comparisons and practical insight into the implementation of open access arrangements and capacity allocation. We are very grateful for their contribution and look forward to their continuing support.”

Steer Davies Gleave will continue to provide support to VALEC to develop its role and processes as a trader of capacity on the Brazilian railway network, with the first year of the project being sponsored by the UK Government’s Foreign & Commonwealth Office. The first task requested was advice on setting freight tariffs, interoperability and roles and responsibilities of agencies within the industry.

Martin Badham, the Secretary for Infrastructure from the UK’s Foreign & Commonwealth Office in Brasilia said, “We were pleased to able to invest in this valuable exercise of bringing the best of UK’s experience to Brazil to share insights and support VALEC. It is clear that the work that the Steer Davies Gleave and Network Rail team delivered was very well received and we look forward to working on the remainder of the project with them.”

Steer Davies Gleave's Mike Goggin giving his presentation at the 5 day workshop in Brasilia.

Paul McMahon (pictured above), Director of Freight at Network Rail, said, "I have enjoyed working with the team at SDG and was very pleased with the workshop that we delivered. I think we offered VALEC an unrivalled level of expertise and knowledge which they clearly appreciated."