The passenger rail segment, one of the most neglected modes of transportation in Brazil in recent decades, is experiencing a new cycle of projects. The São Paulo state government, which last year auctioned the São Paulo–Campinas train, is preparing a public-private partnership (PPP) for a railway line to Sorocaba. At the federal level, six other projects are under study, while private groups are also pursuing ventures. Yet, all these initiatives still face financial, operational, and regulatory challenges before becoming a reality. Among the projects under the Ministry of Transport’s portfolio, the most advanced is the Brasília–Luziânia route—a 60-kilometer stretch with planned investments of R$1.7 billion, plus R$3.7 billion in estimated operating costs. According to Leonardo Cezar Ribeiro, the national secretary for Rail Transport, studies are being finalized, and the auction is expected to take place in 2026. To make the concession viable, a R$1.2 billion funding gap must be bridged. One option under discussion is to include real estate revenues in the project’s financial model. The use of public resources is also on the table, Mr. Ribeiro said. One of the project’s advantages, he explained, is that the rail network would not need to be built from scratch. The stretch connecting the federal capital to Luziânia, in Goiás, currently forms part of the concession held by Ferrovia Centro-Atlântica, operated by VLI, which focuses on freight. The section between the two cities is among those being returned to the government as part of the company’s early renewal of its contract, expected to be concluded in 2026. In addition to the Brasília–Luziânia line, the federal government is studying five other routes that would also use sections returned by freight concessionaires. “The idea is to create a portfolio of projects, always with an eye on economic feasibility. Since these are existing railways, they offer better economic conditions,” the secretary said. In São Paulo, the intercity train projects under development have been made possible through state funding and risk-sharing structures. In the case of the Intercity Train (TIC) to Campinas—awarded in 2024 to a consortium formed by Comporte and China’s CRRC—the route was auctioned together with Line 7–Rubi of the metropolitan train network, which is already operational, a move that increased the contract’s attractiveness. The state is now preparing to auction the TIC to Sorocaba, which will likely extend the existing Line 8–Diamante, operated by Motiva (formerly CCR). The bid is expected to take place between the end of this year and early 2026. The market also includes privately financed railway projects authorized for construction without government participation. The most emblematic case is the proposed high-speed train between São Paulo and Rio de Janeiro, though many in the sector remain skeptical about the feasibility of such a multibillion-real venture. The train would require an estimated R$50 billion in investments, plus another R$10 billion for land expropriations and real estate development, a key element for its viability. Bernardo Figueiredo, CEO of TAV Brasil, the company behind the project, said the group is in the process of securing preliminary environmental permits and has an agreement with a Chinese partner. However, progress has been difficult due to the lack of clear government support. “We are looking for an investor, which is not easy. We are a group of professionals who structure projects; we’re not investors of that scale. Talks with the Chinese were advancing, but they need a signal of government interest,” he said. Asked about the project, Mr. Ribeiro said the government views the initiative positively, but since it is a fully private undertaking, there are limits to the level of support. He mentioned financing from the National Bank for Economic and Social Development (BNDES) as one of the possible avenues to encourage projects of this kind. Recently, the Rio Grande do Sul state government also granted authorization for another private rail project—a passenger line between Porto Alegre and Gramado, under study by Sultrens. According to Renato Sucupira, president of BF Capital, one of the three companies that make up Sultrens, investment is expected to range between R$4 billion and R$4.5 billion. The group also faces the challenge of attracting investors. “We’re talking to potential backers, whether financial or strategic, players who may be interested in both building and operating the line,” he said. With projects of varying profiles in progress, Ana Patrizia Lira, executive director of the National Association of Passenger Rail Transporters (ANPTrilhos), sees an expansion wave taking shape in the sector. “We’re in a different moment. We have projects at different stages, and that’s important for the sector’s development. The industry still needs to mature, diversify funding sources, and attract more investors. But there’s growing concern about ensuring legal certainty so these initiatives can move forward. In São Paulo, the rail sector was incorporated into the regulatory agency, and at the federal level, a policy framework is being developed with guidelines for track-sharing and passenger guarantees,” she said. Analysts, however, remain more skeptical. According to David Goldberg, senior director at A&M Infra, the São Paulo government’s projects face challenges but are more mature and include mechanisms that help attract investors, such as protection against passenger demand risk and a well-structured public payment guarantee system. The federal initiatives, on the other hand, still raise doubts. Juan Landeira, also a senior director at A&M Infra, noted that converting freight tracks for passenger use is not straightforward, especially in sections being returned by concessionaires, which tend to be in poorer condition. “When we talk about passenger trains, several factors come into play—comfort, speed, and safety among them,” he said. For Marcus Quintella, director of FGV Transportes, aside from the Campinas TIC, most projects remain incipient and lack clarity regarding their viability. “It remains to be seen whether there will be interested parties. These are large-scale undertakings, and private capital alone won’t be enough,” he said. Mr. Goldberg of A&M added that even the São Paulo government faces obstacles. “It’s not easy to find players capable of managing these risks, which combine operational challenges with the need for infrastructure investment. Companies have struggled to find contractors with sufficient liquidity,” he said. Passenger rail transport in Brazil began to decline in the 1950s, following a political decision to prioritize road transportation. With reduced public subsidies, operational issues, and the privatization of freight concessions in the 1990s, the use of trains for passenger service nearly disappeared, Mr. Quintella noted. Today, the few remaining passenger services are operated by Vale—on the Carajás Railway, between São Luís (Maranhão) and Parauapebas (Pará), and on the Vitória–Minas line, between the capital cities of the states of Espírito Santo and Minas Gerais. However, these are secondary operations within the company’s freight business. According to Mr. Quintella, Brazil’s main difference from countries that rely heavily on rail transportation is the lack of public investment. “Rail projects require massive funding, and operating costs are high. Fares alone won’t cover investments; subsidies are necessary.” On the other hand, Mr. Goldberg emphasized that Brazil’s PPP framework is now more mature, which helps advance such projects.
