On 8/30/2021, the Provisional Measure No. 1.065/2021 was published in the Federal Official Gazette , which seeks to simplify the procedure for the exploitation of the railway transport service by private companies and, therefore, attract more investments to the sector .
Below are the main innovations brought by MP No. 1.065/2021:
EXPLORATION BY AUTHORIZATION
The Provisional Measure brings the possibility of exploring new railroads through simple authorization, as is already the case in the port, airport and telecommunications sectors.
In the previous system, the exploitation of railways by private companies could only take place under concession or permission regimes, via public tender. In these, the government was responsible for preparing the entire project, structuring it and auctioning it, in addition to receiving back the movable and immovable assets that constituted the railway at the end of the concession.
Under the new regime, companies can submit projects to the government at any time (with the respective environmental, urban and technical studies) and assets do not return to the government at the end of the authorization period, except in the case of public goods transferred to the authorization (art. 14).
The authorization is formalized through an adhesion contract proposed to the Ministry of Infrastructure, by the company interested in operating a new line, and may have a maximum term of 99 years, extendable for equal and successive periods (articles 6 and 7). The essential clauses of this contract are listed in art. 12.
If there is a need to use a public property in the project, it may be assigned, disposed of or have transferred the respective right of use, equally without a bidding process (art. 12, §§ 4 to 6).
Unoperated, returned, deactivated or idle railway sections may also be operated by simple authorization, in which case a public call will be made, by the Ministry of Infrastructure, to choose the administrators (articles 9 to 11).
The Provisional Measure also provides for the possibility of adapting existing concession contracts to the authorization regime, in the following cases: “§1 (…) when a new railway built from a federal railway authorization enters into operation, if the authorization has been granted to the legal entity: I – competitor in order to characterize the railway operation in a competitive logistics market; or: II – member of the same economic group as the current railway administrator, in order to expand the railway extension or capacity, in the same relevant market, in a percentage of not less than fifty percent, defined in the decision referred to in § 2” ( article 34, §1, I and II). The Ministry of Infrastructure will be responsible for the final decision on the adaptation of the contract (art. 34, §2).
PRIVATE RAILWAYS AND INDEPENDENT RAILWAY OPERATOR
The Provisional Measure admits the construction and operation of private railways, upon registration with the National Land Transport Agency (ANTT), provided that they are located exclusively in private areas and in compliance with the guidelines of the national railway transport policy (art. 17).
The Provisional Measure also deals with the Independent Railway Operator, which may operate the railway transport service on its own railways or those managed by third parties (art. 18, I and II). In the latter case, the operator and the railway administrator will enter into a contract governed exclusively by rules of private law, with no link between the operator and the granting authority.
The authorization for this type of exploration will be issued automatically, with the submission of the documentation required in the regulatory rules at the National Land Transport Agency – ANTT (art. 18, §1).
The Provisional Measure authorizes the railway administrators and operators to join together to create a self-regulatory entity, in the form of a non-profit legal entity under private law, to promote its technical-operational regulation (articles 30 and 31). The State’s action will be limited to the regulation of security issues and specific situations (art. 32).
RAILWAY AUTHORIZATION PROGRAM
The provisional measure creates the Railway Authorization Program, with the purpose of promoting private investments in the railway sector through authorization grants (art. 42).
The program encompasses, among other activities, “I – cooperation with States, Federal District and Municipalities, in order to identify and select access and connection railways suitable for exploitation by the market; II – the dialogue with the productive sector to prioritize railway segments through authorization; III – the planning, supervision and supply of railway segments for exploration through authorizations; IV – deliberation on the necessary guidelines for technological development in the railway sector; and V – the establishment of self-regulation guidelines” (art. 42, §1).
The MP also allows states, municipalities and the Federal District to grant rail transport services that are not part of the Federal Rail Subsystem (art. 4, §1). It will be up to the Union, however, to establish the guidelines to ensure the efficiency of the system (art. 3, sole paragraph).
Our team is available for any further clarification on this subject.