Brazil's federal and São Paulo state governments have postponed the public hearing for the São Paulo intercity train network Phase I PPP tender process. The meeting, initially scheduled for July 5 has been put off to August 16.

The reason for the delay is that São Paulo seeks approval to use a existing federal-owned cargo railway, in order to reduce the costs of the project and go on with the new train network. However, this process seems to be stuck due to the turbulent political scenario.

In April 2014, we informed about the São Paulo plans to issue a tender process to develop the project through a PPP contract.

The 24-station railway system rail system will be 431km long and have two routes, the Norte-Sul (north-south) and the Leste-Oeste (east-west). This express railway will require around BRL18.5 billion (US$5.6 billion) in investment. Details of the financing haven't yet been disclosed.

The first phase of the project involves the construction of a 135 km railway linking the city of Americana to state capital São Paulo. The contract will also include implementing control systems, purchasing rolling stock and operating and maintaining the system for a period of 35 years.

The rail network will connect state capital São Paulo to the cities of Campinas, Americana, Jundiaí, Santo André, São Bernardo, São Caetano, Santos, Sorocaba, São Roque, São José dos Campos, Mauá, Taubaté and Pindamonhangaba, according to initial plans disclosed in 2013. 

Investment bank BTG Pactual and consultancy firm Estação da Luz Participações were arranged to carry out feasibility studies on the project.

According to initial plans, it is expected that the PPP model will be similar to the concession model used for the state capital's metro line 6  which was awarded to the consortium 'Move São Paulo', formed by Odebrecht, Queiroz Galvão, UTC Participações and Eco Realty Fundo de Investimentos. The consortium had been the only bidder for the project, as we reported in November 2013.