The world’s four largest ag traders (Archer Daniels Midland Co., Bunge Ltd., Cargill Inc., and Louis Dreyfus Co.) along with their Brazilian rival Amaggi are considering investing in operating BR-163, the road that connects the country’s grain belt to northern ports, as well as a parallel railway, according to EDLP, a firm that conducted a study on the possible venture.
These northern ports now account for 28% of Brazil’s soybean and corn exports, doubling their share over the past eight years as more ports opened and upgraded facilities in the region. But every year it seems there are some problems getting the grain and oilseed to these ports as large stretches of the road are still unpaved and the combination of heavy rains and heavy traffic can quickly turn the road into a traffic nightmare. Just last week, sections of the road had to be closed for this reason.
Roberto Meira, director of the logistics and infrastructure development firm EDLP, says the group will submit a proposed model for handing over the roadway to private investors to Brazil’s government later this week. The plan would hinge on convincing the government to offer a 10-year concession on the road.
The shorter-than-usual timeframe for the road is based on plans for grains shipped by truck to be migrated to the proposed Ferrograo rail line that traverses a similar path. Brazil’s privatization secretary said the rail project could be ready for bidding this year or early in 2020.