Brazilian Economy and Society. Frutuoso Santana Consulate General of Brazil in Chicago Trade and Investment Department

Transcription

1 Brazilian Economy and Society Frutuoso Santana Consulate General of Brazil in Chicago Trade and Investment Department

2 Overview Federal Republic Multiparty democracy Free-market economy Signatory to most international agreements Host of the Soccer World Cup in 2014, and of the Olympic Games in 2016 Peaceful society Largest country in Latin America: 3,285, mi²

3 Population 189 million inhabitants Growth rate: 1.2% per year Age distribution 48.7% 51.3% 92.4 mi males 97.5 mi females Urban population: mi 83.7% 16.3% Rural population: 30.8 mi Source: IBGE

4 Population Roman Catholic (nominal): 73.6% Protestant: 15.4% Spiritualist: 1.3% Other: 9.7% 30 million people rose to the middle class in 5 years

5 Population 0,8 Gini Coefficient ( ) 0,7 0,6 0,5 0,4 0,3 0,2 Indigenous White Asian Black Mixed 0, Source: CPS/FGV

6 Economy GDP Composition by sector Agriculture 6% Industry 27% 6 th labor force in the world: million Unemployment rate: 6% Services 67% Labor force by occupation GDP: $ 2 trillion Trade balance: $20.3 billion Consumption rate in 2010: 7.1% Growth rate in 2010: 7% Foreign reserves: $350 billion Services 66% Agriculture 20% Industry 14%

7 Economy Fiscal and Monetary Policies Internationalization of Brazilian Companies Commodities Exports

8 Economy Fiscal and Monetary Policies Annual Rates of Inflation (%), ,1 7,91 3,89 11, Source: Conjuntura Econômica

9 Economy Fiscal and Monetary Policies Historical Record of Inflation Targets Year Resolution Date Target (%) Variation (p.p) Upper and lower limits (%) Actual Inflation (IPCA %) Resolution 2,615 06/30/ Resolution 2,744 06/28/ Resolution 2,842 Resolution 2, Resolution 2,972 Resolution 3,108 06/28/ /27/ /27/ /25/ Resolution 3,108 06/25/ Resolution 3,210 06/30/ Resolution 3,291 06/23/ Resolution 3,378 06/29/ Resolution 3,463 06/26/ Resolution 3,584 07/01/ Resolution 3,748 06/30/ Resolution 3,880 06/22/ Source: Central Bank of Brazil

10 Economy Internationalization of Brazilian Companies Privatization reforms in the 1990s Search for new markets Technological exchange

11 Economy Commodities Exports Global Market Share of Commodities Soy Poultry Coffee Beef Orange juice Tobacco Soy Poultry Coffee Beef Orange juice Tobacco

12 The Business Climate Higher per capita income in a large consumer market Increased retail trade (Jun 2010/Jun 2011): 16.3% - Furniture and household appliances 2.7% - Hypermarkets, supermarkets, food products, beverages and tobacco 12.0% - Textiles, apparel and footwear 34.3% - Office, computer and communication material and equipment 12% - Pharmaceuticals, medical and orthopedic articles, toiletries and cosmetics 3% - Other articles of personal and domestic use 1.1% - Fuels and lubricants 8.9% - Books, newspapers, magazines and stationery articles

13 The Business Climate Mergers and Acquisitions Domestic Cross border Total Sectoral Distribution Food, Beverage & Tobacco 155 Financial Institutions 135 IT 127 Telecom 111 Oil Industry 100 Metalurgy & Steel 77 Chemical & Petrochemical 70 Insurance 62 Energy Companies 56 Transportation 33

14 The Business Climate Business Costs: Taxes (in R$ million) Specification % change (a) (b) ( c) (b)/(a) ( c)/(b) IR IPI II IOF Cofins CSLL PIS/Pasep CPMF Cide Other Total Source: Ministry of Planning

15 The Business Climate Where the opportunities are Economic success has increased demand on infrastructure Airports (World Cup and Olympic Games demand expansion) Roads (Transport of crops to the coast) Technology (Biotech, Software engineering, etc.) Utilities (Wind farms in the Northeast)

16

17 Brazilian Overview

18 Technology Platforms Rail Grinding Services Ballast Services Ditching & Excavating Rail Handling Data Management & System Diagnostics

19 Fleet Operations 450 employees Contracted services Revenues: $180M Serving major railroads and passenger rail markets across N.A. Outstanding safety record

20 OEM Operations 105 employees Revenues: $80M Produce machines/yr 40+ machines in 30 countries 70K sft of assembly, test & warehouse capacity Outstanding safety record

21 Serving Freight & Passenger Systems Worldwide

22 Loram Value Proposition DESIGN BUILD OPERATE MAINTAIN

23 $15.6 $4.5 $1.5 $5.2 $12.5 $9.9 $1.0 $1.0 $1.0

24 $15.6 $4.5 $1.5 $5.2 $12.5 $9.9 $1.0 $1.0 $1.0

25 History in Brazil Growing business : 48-stone rail grinder to MRS 2006: shoulder ballast cleaner to MRS 2010: RailVacs and 24- stone grinders to Vale

26 Working in Brazil Positives: Substantial market Financial strength Great listeners / collaborators Open to ideas / quick to put them into action Way warmer than Minnesota in winter Challenges Vendor support base limitations Customs hurdles Visa hurdles

27 $15.6 $4.5 $1.5 $5.2 $12.5 $9.9 $1.0 $1.0 $1.0

28 Thanks for your attention For more information, visit us at:

29 Projects for High-speed Trains in Brazil BRAZILIAN HIGH SPEED LINE (RIO DE JANEIRO SÃO PAULO CAMPINAS) Hélio Mauro França Executive Superintendent - ANTT

30 RIO SÃO PAULO HIGH SPEED LINE - Background In recent decades, several studies were developed, sponsored or authorized by the Brazilian Government, with a view to implementing a new railroad between Rio and São Paulo, for passengers and freight. In 2007, the Government decided to review previous studies and contracted a consortium to prepare a feasibility study for a high speed railway line, with a maximum line speed of 350km/h, over 511 kilometres connecting the cities of Rio de Janeiro, São Paulo and Campinas in Brazil. The Consortium prepared detailed studies: vdemand and Revenue Forecasts; valignment Studies; vfinance and Economics Appraisal and Concessioning; vrail Operations and Technology; vtav Capital Cost. The most comprehensive study ever conducted.

31 Brazil HSL - TAV Brasil: South America, Brazil, and the states of Rio de Janeiro and São Paulo

32 Brazil HSL - TAV Brasil: States of Rio de Janeiro and São Paulo and the Area of Influence

33 Brazil HSL - TAV Brasil: Direct Area of Influence for TAV - Metropolitan Areas and Regions

34 Brazil HSL - TAV Brasil: Socio-economic aspects of the regions in the direct area of influence of TAV The region that includes Rio de Janeiro - Sao Paulo - Campinas is the most important economic region of the country. The states of Rio de Janeiro and São Paulo account for 30% of the population and 45.5% of its GDP (Source: IBGE, 2007).

35 Brazil HSL - TAV Brasil: municipalities in the axis of the high-speed line The 41 municipalities in the axis of the Rio São Paulo-Campinas high speed line would correspond to the country's second largest state in terms of population, GDP and higher GDP per Capita of the country. GEOGRAPHICAL AREA Population GDP (In thousand U.S. $) GDP per Capita (in U.S. $) São Paulo State (26 municipalities) ,480, ,25 Rio de Janeiro State (15 municipalities) ,960, ,99 Municipalities along the route of TAV (41) ,441, ,96 BRAZIL Municipalities along the route of TAV in relation to Brazil ,549,635, ,52 13,9% 23,8% 172,1%

36 Brazil HSL - TAV Brasil: and the main HS lines in the world The high speed line Rio - São Paulo - Campinas is comparable to the main HS lines in the world in terms of distance, air traffic and population in key cities. LINE MAIN HIGH SPEED LINES DISTANCE (km) POPULATION (millions hab) AIR TRAFFIC(*) (millions pax/year) TOKYO - OSAKA , PARIS - LYON , SEOUL - PUSAN , BEIJING - SHANGAI N.D MADRID - BARCELONA , RIO - SÃO PAULO , (*) BEFORE THE INTRODUCTION OF HIGH SPEED LINE Source:PROF. A. LOPEZ PITA presentation at ANTT in jul 2010.

37 Brazil HSL - TAV Brasil: Demand for Transport in 2008 Passenger transport matrix (thousand passengers/year) Modal transport Rio - São Paulo Rio - Campinas Regional Total Air Car Bus Total Passenger transport matrix (em %) Modal transport Rio - São Paulo Rio - Campinas Regional Total Air 60,4 56, ,0 Car 16,5 18,0 61,1 50,8 Bus 23,1 25,1 38,9 35,3 Total

38 Brazil HSL - TAV Brasil: Demand for Transport - Mode split and reasons for travel

39 Brazil HSL - TAV Brasil: Fare Parameters (US$) Transport modal ORIGIN DESTINATION TAV Economy Business Air Car Bus Rio de Janeiro São Paulo (peak hour) São Paulo Rio de Janeiro Campinas Rio de Janeiro Volta Redonda/Barra Mansa São José dos Campos São José dos Campos Volta Redonda/Barra Mansa São Paulo Campinas São José dos Campos São Paulo Campinas São Paulo Campinas

40 Brazil HSL - TAV Brasil: Travel Time Parameters (minutes) ORIGIN DESTINATION TAV Transport Mode Air Car Bus Rio de Janeiro São Paulo Rio de Janeiro Campinas Rio de Janeiro Volta Redonda/Barra Mansa São José dos Campos São José dos Campos Volta Redonda/Barra Mansa São Paulo Campinas São José dos Campos São Paulo Campinas São Paulo Campinas

41 Brazil HSL - TAV Brasil: Demand for Transport with TAV Passenger transport matrix (thousand passengers/year) Without TAV Modal RIO - SÃO PAULO RIO - CAMPINAS REGIONAL TOTAL Air Car Bus Total With TAV TAV Air Car Bus Total

42 Brazil HSL - TAV Brasil: Demand Forecast (thousand passengers/year) ORIGIN DESTINATION EXPRESS SERVICE Rio de Janeiro São Paulo Rio de Janeiro Campinas REGIONAL SERVICE Rio de Janeiro V.Redonda/B.Mansa S.J.Campos S.J.Campos V.Redonda/B.Mansa São Paulo Campinas S.J.Campos São Paulo Campinas São Paulo Campinas TOTAL

43 Brazil HSL - TAV Brasil: Revenue Forecast US$ million ORIGEM DESTINO SERVIÇO EXPRESSO 850, , , ,2 Rio de Janeiro São Paulo 765, , , ,5 Rio de Janeiro Campinas 85,1 141,2 257,7 370,6 SERVIÇO REGIONAL 502,5 684,5 978, ,5 Rio de Janeiro V. Redonda/B. Mansa 61,3 76,6 98,6 141,7 S.J. dos Campos 12,6 17,5 25,1 36,1 S.J. dos Campos 10,1 13,4 18,2 26,1 V. Redonda/B. Mansa São Paulo 10,4 13,3 17,5 25,1 Campinas 2,7 3,8 5,4 7,8 S.J. dos Campos São Paulo 143,4 192,2 273,0 392,6 Campinas 37,2 57,2 88,7 127,6 São Paulo Campinas 224,7 310,5 452,4 650,6 TOTAL 1.352, , , ,7

44 Brazil HSL - TAV Brasil: Engineering and Alignment Parameters of the railroad: Gauge: Max. Speed Project: Min. horizontal radius: Min. Vertical radius: Slope max: Train axle load: Platform: 1435 mm 350 km / h 7228 m m 35 mm / m 17 t 500 m

45 Brazil HSL - TAV Brasil: Engineering and Alignment Parameters used in defining the track alignment Technical and operational parameters: v v v v Construction cost considered the geological risks; Travel time; Operating Cost Maintenance cost Social and environmental parameters: v v Social Impact (expropriation, resettlement, redevelopment, relocation of roads, etc.); Environmental impact (compensatory planting, environmental compensation, restricted areas);

46 Brazil HSL - TAV Brasil: Engineering and Alignment STRETCH Extension (km) Barão de Mauá Galeão 15.2 Galeão Barra Mansa/Volta Redonda Barra Mansa / Volta Redonda S. J. Campos S. J. Campos Guarulhos 63.0 Guarulhos Campo de Marte 21.6 Campo de Marte Viracopos 76.1 Viracopos Campinas 22.9 TOTAL EXTENSION Tunnel 90.9 (18%) Viaducts and Brigdes 10.8 (21%) Surface (61%)

47 Brazil HSL - TAV Brasil: CAPEX and OPEX CAPEX Item Total Geral % US$ thousand Earthwork 1,238, ,4 Structures 10,184, ,8 Buildings and equipment 795, ,1 Signalling and telecommunications 333, ,7 Permanent way 1,129, ,9 Social and environmental works 2,267, ,8 Electricfication 719, ,7 Rolling stock 1,447, ,5 Complementary Services 1,172, ,1 TOTAL 19,288, ,0 US$ 37,761,1 thousand /Km

48 Brazil HSL - TAV Brasil: CAPEX and OPEX OPEX ITEM US$ x 10 6 (%) US$ x 10 6 (%) US$ x 10 6 (%) US$ x 10 6 (%) PERMANENT WAY STRUCTURES ROLLING STOCK ADMINISTRATIVE EXPENSES MARKETING & SALES TOTAL

49 NEW CONCESSION MODEL TAV PROJECT Rio de Janeiro - São Paulo-Campinas

50 PREMISES OF THE NEW MODEL TAV Concession divided into two phases: Phase I - Allocation of the operation for TAV passenger transport services Phase II Concession of TAV infrastructure and real state development Benchmarks studies, standards and technical requirements remain the same.

51 NEW MODEL DIAGRAM Equity ETAV BRAZILIAN GOVERNMENT Equity Finance Guarantee Transfer of technology Equity ANTT BNDES Banks Financing Equity Investors Operator/Technology Expenses for the use of the infrastructure Investments in systems and rolling stocks Final Engineering Project Concession 1 Operation and infrastructure and system maintenance Services Revenues TAV SYSTEM infrastructure Concession 2 Infrastructure constructin and real stare development Revenues for the use of the infrastructure Real state revenues Investment Financing Infrastructure Real State Development Civil work contract payments Civil work contract Banks Financing Equity Investors Transort Service Fare PASSENGERS Real State Investments Construction Companies

52 Phase I - Allocation of the operation for TAV passenger transport services Elements of the Phase I Selection of technology to be adopted Obligation to transfer the latest technology Obligation to maintain adequate level of service Obligation to provide technical support in implementing and certifying the conformity of the infrastructure Final engineering design for the infrastructure Operation of the TAVT (including system and infrastructure maintenance)

53 Phase II Concession of TAV infrastructure and real state development Elements of the Phase II Obligation of deployment of infrastructure designed by the operator of the Phase I Access to public finance investment in infrastructure Obligation to follow guidelines of the granting authority in contracting infrastructure works Commercial and real estate development in areas adjacent stations

54 2011 SCHEDULE PHASE I SCHEDULE August Model definition Phase I September Public hearings bidding documents October Submission to TCU (Accounting Office) November Publication of bidding documents Phase I 1 st Semester 2012 Public Auction Phase I

55 Economic and financial aspects - CAPEX Cost items- CAPEX TOTAL INFRASTRUCTURE OPERATION Earthworks , ,00 Structures , ,00 Permanent way , ,00 Builduings and equipment , ,00 Signalling , ,00 Telecommunication , ,00 Electrification , , ,00 Socio-environmental costs , ,00 Rolling stock , ,00 Complementary services , , ,37 ANTT regulatory costs , ,00 Performance bond , ,00 TOTAL , , ,37

56 Brazil HSL - TAV Brasil: Transfer of Technology Bidder shall present a proposal for a Program for Transfer of Technology in certain areas defined as technological focus. v The Technology Transfer shall comprise all technical and scientific knowledge created and transmitted through materials, processes, methods, tools and technical assistance programs and training, necessary for the construction, operation and maintenance TAV systems; v The technology provider shall ensure, on a non-costly base, to transfer all technology related to the technological focus for the Federal Public Enterprise, or Local Agents indicated by it; v To encourage the development of Brazilian industry and market, the Concessionaire shall ensure a minimum percentage of local content of goods and services used in the construction and operation of TAV.

57 Brazil HSL - TAV Brasil: CHALLENGES ACCESSIBILITY - Investments to improve users' access to stations by means of mass transportation and high capacity urban roads; QUALIFICATION OF DOMESTIC INDUSTRY Implementation of programs for the transfer and absorption of technology, with increased investment in domestic industry to offer, in a competitive way, equipment, systems and services for expansion of high-speed network; QUALIFICATION OF WORK FORCE - Training of professionals to meet future demand in the industry segment of high-speed transport services; URBAN TRANSFORMATION - Improving the quality of life in cities serviced by TAV in order to avoid the bottlenecks resulting from the implementation of high-speed lines; ENVIRONMENTAL LICENSING - Obtaining environmental permits in time and with priority given to preservation of the environment to effectively capture the advantages of high speed transport;

58 Brazil HSL - TAV Brasil: CHALLENGES EXPANSION OF HIGH SPEED NETWORK IN BRAZIL Studies included the PAC II EF-333 National Plan for Railroad EF-222 Line under bidding process

59 TREM DE ALTA VELOCIDADE THANKS!

60 RAILROAD TRANSPORTATION IN BRAZIL: THE DECADE OF CHALLENGES AND OPPORTUNITIES Vicente Abate President of ABIFER - Brazilian Association of the Railroad Industry Minneapolis, September 20, 2011

61 ABIFER, 34 years

62 INSTITUTIONAL PRESENTATION

63 ABIFER OUR MISSION To instigate the Brazilian railway industry growth through incentives to freight and mass transportation expansion and permanent technical support to rail operators and end users.

64 ABIFER OUR VISION To be the reference body in Brazil and Latin America for the subjects related to rail transportation. OUR VALUES > Focus in Brazil > Business belief > Transparency in our actions > Sustained growth > Value creation

65 ASSOCIATES WHO WE ARE 1 Vehicles, Systems and Components manufacturers for the railway marketplace. 2 Design companies, Engineering consultants and Service providers to the railway segment.

66 ASSOCIATES

67 ASSOCIATES MAIN PRODUCTS > Diesel-Electric and Diesel-Hydraulic Locomotives > Freight cars > Steel mill cars > Electrical Unit Trains for Metro and Suburb > High Speed Trains > LRV Light Rail Vehicles > Monorails > Signalling, Electrification and Telecommunication Systems > Bogies, Wheels, Axles, Springs, Bearings, Couplers, Brake and Traction Motors > Track Materials: Elastic clips l Junction bonds l Turnouts l Sleepers l Welding

68 ASSOCIATES MAIN SERVICES > Engineering > Consulting > Maintenance, Repair and Modernization of vehicles, systems and components

69 INVESTMENTS RAILWAY INDUSTRY Source: ABIFER R$1.1 billion (from 2003 to 2010) Expansion and modernization of the existing plants, new plants and new technology

70 ANNUAL CAPACITIES ABIFER associates have increased year by year their production capacity FREIGHT CARS 900 PASSENGER CARS 150 LOCOMOTIVES

71 INNOVATIONS IMPLEMENTED BY THE BRAZILIAN RAILWAY INDUSTRY > High capacity 150 ton gondola cars for iron ore transportation with 37.5 ton per axle bogies; > Hopper cars for sugar transportation with fast unload system and all doors operated by only one man; > Double stack cars for containers transportation; > Electronically Controlled Pneumatic brake systems for freight cars; > Railway wheels made of micro-alloyed steel; > 4,400 HP AC diesel-electric locomotives; > Diesel-hydraulic yard and line locomotives; > CBTC signalling systems(driverless); > Passenger cars with air conditioning system, closed circuit TV and larger doors for easy access for people with special needs; > Shock absorbers in metros to reduce track noise and vibration; > Concrete sleepers for environment friendly use.

72 IRON ORE GONDOLA CAR Source: AmstedMaxion > BROAD GAUGE (1,600 mm) State owned Railroad (until 1997) VALE and MRS (2000) VALE and MRS (2007) VALE and MRS (2009/2010) G.R.L (t) Light weight (t) Load (t) Load gain (t)

73 BULK SUGAR HOPPER CAR IMPROVEMENTS OLD CARS NEW CARS LOAD (ton) DISCHARGE TIME (minutes) PEOPLE FOR DISCHARGE (ea)

74 PRODUCTION

75 FREIGHT CARS BRAZILIAN PRODUCTION > PER DECADE Source: ABIFER (F)

76 FREIGHT CARS BRAZILIAN PRODUCTION Source: ABIFER (F)

77 LOCOMOTIVES BRAZILIAN PRODUCTION > PER DECADE Source: ABIFER (F)

78 LOCOMOTIVES BRAZILIAN PRODUCTION Source: ABIFER (F)

79 PASSENGER CARS BRAZILIAN PRODUCTION > PER DECADE Source: ABIFER (F)

80 PASSENGER CARS BRAZILIAN PRODUCTION Source: ABIFER (F)

81 RAILWAY VEHICLES

82 GONDOLA CARS MRS VALE

83 HOPPER CARS FERTILIZERS SUGAR SOYBEAN PRODUCTS AUTOMATIC DISCHARGE BALLAST AUTOMATIC DISCHARGE IRON ORE AUTOMATIC DISCHARGE PHOSPHATE

84 OTHER TYPES AUTOMOBILE CAR FUEL SPINE CAR DOUBLE STACK LNG TRANSPORTATION

85 LOCOMOTIVES DIESEL-ELECTRIC DIESEL-HYDRAULIC

86 PASSENGER CARS Metro - SP CPTM SP (suburb)

87 LIGHT RAIL VEHICLES Brasília Cariri

88 MONORAILS

89 RAILROAD FREIGHT TRANSPORTATION IN BRAZIL

90 ON GOING PROJECTS Source: Ministério dos Transportes

91 FREIGHT TRANSPORTATION MARKET SHARE Source: PNLT/ MT CURRENT AND PROJECTED Rail M. Share (%) Network (km1000) ABIFER Estimations

92 RAILROAD PASSENGER TRANSPORTATION IN BRAZIL

93 URBAN RAILROAD SYSTEMS Fortaleza (METROFOR) Linha Oeste (VLT) CMTP - Metrô de Teresina Trens de superfície - Natal Trens de superfície João Pessoa Metrô de Recife Trens de superfície - Recife Trens de superfície - Maceió Metrô de Salvador Trem de subúrbio de Salvador Metrô de Brasília Metrô de Belo Horizonte Metrô do Rio de Janeiro SUPERVIA Metrô-SP, Monotrilho e VLT Trens de superfície CPTM Trensurb - Porto Alegre

94 Serviços Regionais Sorocaba Tempo de viagem estimado : até 40 minutos 90 km Situação atual: elaboração do projeto funcional Jundiaí Tempo de viagem estimado : até 25 minutos 45 a 48 km Situação atual: elaboração do projeto funcional. novos padrões de serviços: Competitivo Confortável Seguro Regularidade Confiabilidade Acessibilidade Integrado Santos Localizaç ão Central à Definir Estudo da Mobilidade da Macro Metrópole Paulista Em processo de contratação CPTM Malha Ferroviária Tempo de viagem estimado : 40 minutos 72 km Situação atual: em contratação do projeto funcional

95 TAV HIGH SPEED TRAIN

96 TAV EXPECTED IMPACTS Labor Generation Technological Development Time Reduction Adjustment in the demand: highways and airports Pollution Reduction Traffic Reduction

97 TAV ON GOING PROJECTS

98 AVAILABLE PLANTS IN BRAZIL FOR HIGH SPEED TRAINS ASSEMBLING IESA TTRANS AMSTEDMAXION / BOMBARDIER SIEMENS CAF ALSTOM

99 MANY THANKS Vicente Abate President ABIFER Tel: +55 (11) Facebook: ABIFER

100 Logistic Infrastructure Scenario in Brazil Marcelo Perrupato Secretary for Transportation National Policy Minneapolis, September 20, 2011 Ministry of Transportation

101 Ministry of Transportation Brazilian Economic Scenario

102 Positive GDP Growth for Brazil and China Annualized Quarter data * Forecasts: USA and China - JP Morgan and Brazil - Ministry of Finance Sources: BEA (USA), JPMorgan (China) and IBGE (Brasil) Produced by: Ministry of Finance Ministry of Transportation

103 GDP Growth International Comparison 2 nd Quarter/09* - % * Growth relating to the previuos quarter (1 st Q 2009), updated annually and seasonally Source: GDW JP Morgan 09/11/2009 and IBGE for Brazil Ministry of Transportation

104 GDP and Consumption Change in the last 12 months - % Source: IBGE Produced by: Ministry of Finance Ministry of Transportation

105 Reduction of External Vulnerability US$ billion Source: Ministry of Development, Industry and Commerce. Produced by: Ministry of Finance Ministry of Transportation

106 Total External Net Debt % of GDP * Forecast July 2009 Source: Central Bank of Brazil Produced by: Ministry of Finance Ministry of Transportation

107 Foreign Exchange Reserves (International Liquidity) US$ billion *Position on September 8 th, Source: Central Bank of Brazil. Prepared by: Ministry of Finance Ministry of Transportation

108 Ministry of Transportation Logistic Infrastructure

109 Road Network In km JURISDICTION PAVED NON PAVED TOTAL FEDERAL 60,469 13,604 74,073 STATE 122, , ,318 MUNICIPAL 24,104 1,256,188 1,280,292 TOTAL NATIONAL 207,462 1,389,221 1,596,683 Ministry of Transportation

110 Rail Network National Rail Network 29,817 km Federal Rail Network under Concession 28,314 km 12 concessions operated by 5 private groups and 2 state-owned companies Ministry of Transportation

111 National Ports 50 public ports in Brazil sea and river 26 Federal Port Companies and National Department for Transport Infrastructure (DNIT) 23 States and Municipalities 1 private sector Ministry of Transportation

112 Inland Waterways 28,000 km of inland waterways Potential utilization of over 15,000 km of new waterways Transport of over 25 million tons/year Agricultural and mineral products, alcohol, construction material (sand, gravel), fertilizers Main Inland Waterways under operation Paraná Tietê 1,660 km Amazonas - Madeira 4,164 km Tapajós 1,046 km Capim 372 km Tocantins Araguaia 3,040 km * São Francisco 1,371 km Paraguai 1,323 km Jacuí - Taquari and Lagoa dos Patos 670 km TOTAL km Ministry of Transportation * Usable conditions

113 Inland Waterways system BASIN STATES APROXIMATED EXTENSIONS (km) NAVIGABLE POTENTIAL TOTAL* MAIN RIVERS AMAZÔNICA AM, PA, AC, RO, RR, e AP 18, ,023 Amazonas, Solimões, Negro, Branco, Madeira, Purus, Juruá, Tapajós, Teles Pires, Juruena, Mamoré, e Guaporé NORDESTE MA e PI 1,740 2,975 4,715 Mearim, Pindaré, Itapecuru, Parnaíba e Balsas TOCANTINS/ARAGUAIA TO, MA e GO 2,200 1,300 3,500 Tocantins, Araguaiae Mortes SÃO FRANCISCO MG, BA, PE e SE 1,400 2,700 4,100 São Francisco, Grande e Corrente LESTE MG, ES e RJ - 1,094 1,094 TIETÊ/PARANÁ SP, PR e SC 1,900 2,900 4,800 PARAGUAI MT, MS e PR 1,280 1,815 3,095 SUL RS ,300 Doce, Paraíba do Sul e Jequitinhonha Paraná, Tietê, Paranaíba, Grande, Ivaí e Ivinheima Paraguai, Cuiabá, Miranda, São Lourenço, Taquari e Iaurú Jacuí, Taquarí,Lagoa dos Patos e Lagoa Mirim URUGUAI RS e SC - 1,200 1,200 Uruguai e Ibicuí TOTAL 27,420 15, ,827.5 * Not necessarily continuous stretches. Ministry of Transportation

114 Ro-Ro Terminal in Manaus (State of Amazonas) Convoy on a Tietê River Canal (State of São Paulo) Construction of Tucuruí Locks (State Ministry of Pará) of Transportation Convoy on the Madeira River (States of Amazonas & Rondônia)

115 Ministry of Transportation Transport Policy and Planning

116 The transport matrix is unbalanced considering the size of Brazil 13% 4% Road Rail Water Pipe/Air 25% 58% Ministry of Transportation

117 which is proved as compared with similar-size countries. Russia 81% 8% 11% Canada 46% 43% 11% Australia 43% 53% 4% USA China Brazil 25% 37% 43% 32% 25% 50% 13% 58% 17% Ministry of Transportation Rail Road Water & others

118 To organize such scenario and recover the transport sector, the Ministry of Transport has developed the National Plan for Logistics and Transportation (PNLT) An instrument for strategic organization with an integrated view on the territory and development. Transport as an agent to induce and facilitate development. A more balanced Brazilian transport matrix with a significant participation of rail and water modes, which are more efficient in terms of economy and energy consumption, with less emission of CO2 and NOx. Ministry of Transportation

119 PNLT indicates ways to change the transport matrix Consolidation of a new Brazilian rail network (Law 11772/2008) with the implementation of 11,800 km of new rail lines, with 10,700 km of large-gauge tracks. New railways will serve areas of agricultural & mineral new frontiers. This new basic railway system prepares the Country for a new economic growth cycle to meet the domestic demand increase and integration with exporting ports. Gradual transfer of general cargo from roads to railways, inland waterways, and coastal shipping. Ministry of Transportation

120 The Brazilian power generation matrix is clean, based on hydro-electric plants. It is needed to make this feature compatible with navigation needs 100% 90% 80% 70% Power Generation Matrix Brazil and the World (%) Other Coal 60% 50% 40% 30% 20% 10% 0% BRAZIL 2007 OECD2006 WORLD Hydraulic Nuclear Gas Petroleum Ministry of Transportation 483 TWh - 89% 10,460 TWh - 16% 18,930 TWh - 18% % renewable Source: MME

121 Power Generation Matrix in Brazil is markedly renewable Ministry of Transportation

122 Energy consumption all sources (%) Souce: MME / BEM 2006 Ministry of Transportation

123 Oil consumption by sectors (%) Source: MME / BEN 2006 Ministry of Transportation

124 Transport Matrix - Present and Future Road Rail Water Pipe Air Source: PNLT Processing, considering energy consumption Ministry of Transportation

125 Benefits from the Transport Matrix change 2005 to 2023/2025 (Transport production grows from 851 to 1,510 bi TKU) 38% of energy efficiency increase 41% of fuel consumption reduction 32% of CO 2 emission reduction 39% of NO x emission reduction Ministry of Transportation

126 Ministry of Transportation PAC Growth Acceleration Program

127 Background Brazil has faced a long period of low investment in logistic infrastructure Better economic conditions have allowed: Rehabilitation of public investment capability Favorable scenario for partnerships with the private sector Road Concessions Railroad Concessions Ministry of Transportation

128 PAC After two decades, it is the first initiative to accomplish a significant program of investments in transportation Public investments selected from the PNLT Projects with strong potential for generating economic & social return Synergy among projects Rehabilitation of the existing infrastructure New projects and conclusion of projects under way Ministry of Transportation

129 Main PAC s Projects Highways Construction of new highways Expansion of the existing road capacity Rehabilitation of the existing road network 2,989 km 1,926 km 53,585 km Railways Rail network capacity increase Expansion of the rail network (12,000 km): 2,700 under construction; 1,500 to be built; 5,300 under studies & design; 2,500 under analysis Inland Waterways Construction of inland waterway terminals in Amazonia Construction of locks Incentive to Shipbuilding (Financing) Construction of ocean-going, coastal, maritime aid and river vessels (384 vessels, 103 of which finished) Construction and modernization of 8 shipyards Ministry of Transportation

130 Partnerships with the Private Sector Ministry of Transportation

131 Road Concessions 1 st phase of the Federal Highway Concession Program 1,482 km in 3 States: Rio de Janeiro, São Paulo and Rio Grande do Sul (Concluded) 2 nd phase of the Federal Highway Concession Program 3,228 km in 6 States: Bahia, Minas Gerais, Rio de Janeiro, São Paulo, Paraná and Santa Catarina (Concluded) 3 rd phase of Federal Highway Concession Program 2,230 km in 5 States: Minas Gerais, Espírito Santo, Goiás, Federal District and Santa Catarina Bidding in 2010 Ministry of Transportation

132 FEDERAL HIGHWAY CONCESSION PROGRAM Niterói Ministry of Transportation 1 st Phase 1,482 km 2 nd Phase 3,228 km 3 rd Phase 2,230 km

133 Railway Program Public investment together with private funds from the entrepreneur North-South Railway 719 km Açailândia/MA Palmas/TO sub-concession concluded in Dec ,535 km Palmas/TO Estrela d Oeste/SP under way: construction works, section Palmas/Anápolis (855 km); and studies relating the section Anápolis/Estrela d Oeste (680 km) West-East Integration Railway 1,490 km Figueirópolis-TO / Ilhéus-BA Studies and project under way Ministry of Transportation

134 Ministry of Transportation Projects for Railways Expansion in Brazil

135 High Speed Train Rio de Janeiro São Paulo Campinas Extension: 511 km Serves the most populous and economically developed region in Brazil Studies on demand, alignment, geology, operation and economic-financial modeling are concluded Call for bidding and auction for technology: 1 st semester of 2012 Transfer of technology is mandatory The winner will be responsible for : final engineering design maintenance operation Call for bidding and auction for the High Speed Train: Construction Ministry of Transportation

136 High Speed Train Rio de Janeiro - São Paulo - Campinas PROPOSED STATIONS STATION LOCATIONS Ministry of Transportation

137 Major Directives from the Ministry of Cities for Urban Mobility Implement corridors and transport equipments for all major cities with more than 300 thousand inhabitants, state capitals and metropolitan regions, focusing bus and rail systems, including 60% expansion in the existing metro network PAC mobilility goals: Existing network: 215,7 km Expansion of 133,5 km up to 2022 Metro network (São Paulo, Rio, Recife, B. Horizonte, Salvador, Fortaleza, Brasília) Rail & VLT (São Paulo, Rio, P. Alegre, Natal, Salvador, J. Pessoa, Recife, Fortaleza, Maceió, N. Hamburgo, Curitiba) Ministry of Transportation

138 Metrô de Fortaleza Trens de superfície Fortaleza (METROFOR) Linha Oeste (VLT) Trens de superfície - Natal Trens de superfície João Pessoa Metrô de Recife Trens de superfície - Recife Trens de superfície - Maceió Metrô de Salvador Trem de subúrbio de Salvador Metrô de Brasília Metrô de Belo Horizonte Metrô do Rio de Janeiro Rio de Janeiro - SUPERVIA Metrô, monotrilho e VLT de São Paulo Trens de superfície São Paulo CPTM Trens de superfície - Porto Alegre Ministry of Transportation

139 São Paulo Metro 4 existing lines totalling 62.3 km 3,500,000 pax/day 12 km expansion (private operation) 11 km of new line (5) in km of 2 monorail lines in 2014 Expansion Expresso Tiradentes - 23 km monorail Expansion of 6 km Orange line subway. Basic Design 12 km Monorail or VLT: S. Bernardo-São Paulo CPTM VLT 6 existing lines totalling km 2,150,000 pax/day New line (13) with 20 km in new trains (8 cars each) in 2014 Design Capacity: 4,100,000 pax/day(3 min headway) PPP operation under analysis Ministry of Transportation mapa

140 Maceió Diesel VLT 1 existing line totalling 32.1 km 6,000 pax/day System is under improvement with VLT rolling stock Ministry of Transportation mapa

141 Salvador Surface Rail 1 existing line totalling 17 km 12,000 pax/day Under improvement Public operation Salvador Metro 1 existing line totalling 6 km Expansion to 12 km in ,000 pax/day forecast Public operation Ministry of Transportation mapa

142 Fortaleza Metro South Line (under construction) 1 line totalling 17 km 190,000 pax/day Operation in lots of 10 trains each (with 4 cars) Fortaleza Diesel VLT West line 1 existing line totalling 21 km 8,000 pax/day May be expanded for integration with the metro system State public operation Ministry of Transportation mapa

143 Brasília Metro 1 existing line totalling 40.3 km Brasília 120,000 pax/day Expansion of Rolim stock for 190,000 pax/day Public Operation Ministry of Transportation mapa

144 Belo Horizonte Metro - CBTU 1 existing line totalling 2.2 km 170,000 pax/day Capacity forecast: 240,000 pax/day Need for 10 new trains (4 cars each) Final engineering design for Lines 2 and 3 totalling 33.8 km Ministry of Transportation mapa

145 João Pessoa VLT - CBTU 1 existing line totalling 30 KM 11,000 pax/day Design for improvement under analysis Ministry of Transportation mapa

146 Recife Metro - CBTU 2 existing lines totalling 39.7 km 220,000 pax/day 15 TUE (eletric train unit) Public operation Recife VLT South Line 2 existing lines totalling 26.1 km 6,000 pax/day Under improvement (connecting to SUAPE Industrial Port) PAC I Ministry of Transportation mapa

147 Rio de Janeiro Metro 2 existing lines totalling 35.6 km 550,000 pax/day Line 4 under construction with14 km (Ipanema - Barra da Tijuca) Demand forecast 250,000 pax/day Prospective construction of Line 3 (Niterói -São Gonçalo) for Olympic Games 2016 Rio de Janeiro Metro SUPERVIA 5 existing lines totalling 225 km 500,000 pax/day 1,100,000 pax/day demand forecast Lines and Stations Improvement with 90 addition TUE (eletric train units) to attend Olympic Games 2016 Ministry of Transportation mapa

148 Natal Diesel VLT 2 existing lines totalling 56.2 km 7,000 pax/day Future improvement under analysis Ministry of Transportation mapa

149 Porto Alegre VLT TRENSURB 1 existing line totalling 33.8 km 160,000 pax/day Expansion of 9 km in 2011 with 8 new TUE (6 cars each) Demand forecast: 200,000 pax/day Ministry of Transportation mapa

150 Passengers traffic on railway cargo network Low demand cargo lines: Feasibility studies are financed by the Ministry of Transport and implementation and operation by private enterprises, basically for tourism sector (14 prospective services throughout the Country) Regular demand cargo lines: Passengers traffic operated in non priority basis New railway expansion lines: Passengers traffic may be effectively operated in regular basis (under analysis by the Government) Ministry of Transportation

151 Ministry of Transportation Highlights of the Inland Waterway Sector

152 Inland Waterway Map Navigable stretches Ministry of Transportation

153 Inland Waterway Development Brazil is already developing the rehabilitation and structuring of the railway system Now the challenge is to structure an inland waterway system that contributes to a better equilibrium of the Brazilian transport matrix in terms of energy, economy and sustainability Such an arrangement implies a governmental articulation concerning the multiple use of water resources and the appropriate environmental handling Ministry of Transportation

154 Strategic Inland Waterway Plan Structures an organized and comprehensive instrument that, on the basis of the main potential-navigation hydrographic regions, aims to: Identify dredging and rock blasting works Identify and ranking works of dam crossing Structure inland waterway terminals Define institutional parameters for the inland waterway sector, considering the multiple use of water (water supply, irrigation, energy generation (Brazilian matrix is clean, basically hydro-electric generation), recreation, sanitation and transportation Strong articulation and integration with other public and private agencies (especially the National Water Agency) Ministry of Transportation

155 Inland Waterway Regions LEGEND Amazônica Tocantins / Araguaia Atlântico Nordeste Ocidental Parnaíba Atlântico Nordeste Oriental São Francisco Atlântico Leste Atlântico Sudeste Atlântico Sul Paraguai Paraná Uruguai Source: Divisão Hidrográfica Nacional, Conselho Nacional de Ministry Recursos Hídricos, of Resolução Transportation nº 32 de 15 de outubro de 2003.

156 Opportunities for Cooperation All those points, specially concerning the increasing of the railway network, represent challenges to be faced by Brazil, as well as opportunities for transferring technology and international experience and for partnership on investments. Worldwide countries will certainly be important partners in such a process. Ministry of Transportation

157 com o Ministério Ministry of Transportation