São Paulo government hands over CPTM urban train lines operation to private enterprise

RIO DE JANEIRO, BRAZIL – The ViaMobilidade consortium, comprising CCR and RuasInvest, on Tuesday, April 20th, won the concession auction for the lines 8-Diamante and 9-Esmeralda of Companhia Paulista de Trens Metropolitanos (São Paulo Metropolitan Trains Company- CPTM).

The group offered R$980 (US$175) million and won the bid, with a premium 202% above the initial forecast. The government’s expectation was to get at least R$323.9 million for the concession. The international competition took place at the headquarters of B3, the Stock Exchange, in downtown São Paulo.

This is the first time that the São Paulo state government hands over the CPTM train service to the private sector.

With the victory, ViaMobilidade will take over the operation of train lines for the next 30 years and will have to invest R$3.2 billion in infrastructure, such as the acquisition of trains and the improvement of stations.

“Winning this concession, for us, is something very relevant, because it is within an institutional and regulatory environment of the São Paulo state government that we have always believed in and been involved with. It gives us legal security and the guarantee of a successful long-term project,” says Luís Valença, president of CCR.

According to the government, the two CPTM lines are 74 km long and transport more than 1 million passengers per day. The 8-Diamante line comprises the stretches between the stations Júlio Prestes, in the center of the capital, and Itapevi, in Greater São Paulo. The 9-Esmeralda line connects Osasco, in Greater São Paulo, to Grajaú, in the south zone.

According to governor João Doria (PSDB), the state will cut spending by about R$680 million per year with the administration of both lines. “Resources that will be invested in improving other services for the population,” he summarized. He said that the money paid by the winning consortium will be invested in social projects in the areas of health, education and public safety.

For Metropolitan Transportation Secretary of São Paulo Alexandre Baldy, ViaMobilidade’s challenge will be to introduce the “Metrô standard” in the operation of the Diamante and Esmeralda lines, with newer and more accessible stations. According to him, the main bottleneck is to reduce the stopping intervals of trains and, consequently, increase passenger flow.

Besides the winners, 3 other consortiums took part in the auction: Mobitrens (comprising Comporte, Consbem and CAF Investment Projects), Integração (Iberica Holding and Metra) and Itapemirim and Encalso Construções.

The government also plans to offer, possibly on July 15th, the concession of 22 regional airports to the private sector. The Doria administration’s concessions package also includes sea and river crossings and the highway system.

Source: Metropoles