Andréa Novais

Andréa Novais

The Brazil Business


Railway infrastructure in Brazil

Andréa Novais

Andréa Novais

The Brazil Business


Despite the efforts made by the federal government through PAC, Brazil still ranks the first position among the countries with the worse transportation structure. Low quality and no integration between different transportation methods were pointed out as the two responsible for such disappointing result.


Among the transportation methods available in Brazil, railways are the second worst, only behind maritime transportation. Its short length and concentration in a few products (iron ore alone is responsible for 74% of this transportation method) are pointed out as some of the main reasons for such a low performance of this transportation method.


In Brazil, there is no credit line for the construction of subways and urban trains. Also, electricity is more expensive during rush hours, what pushes away possible investors of the sector.

According to ANTF (Associação Nacional dos Transportes Ferroviários) and ABIFER (Associação Brasileira da Indústria Ferroviária), both associations connected to the Brazilian railroad system, the main hurdles for the Brazilian railroad to take off are:

  • Lack of funding;
  • Misuse of funds;
  • Over taxation of electricity;
  • Lack of more accessible credit;


CIDE is the abbreviation of “Contribuição e Intervenção no Domínio Econômico”. It applies to royalty payments, technology transfers, compensation of technology supply and technical assistance.

It was initially created to support the financing of infrastructure projects related to transportation, but according to ABIFER, less than 10% of the amount collected by the tax was actually invested in transportation.

Railway as public transportation

Metropolitan areas in Brazil are mostly disorganized and inhabited by people who leave early morning to work and study in the city and come back at night, only to sleep. For this reason, these cities are known as “dorm cities”, as its inhabitants don’t work, study or barely shop there.

Dorm cities depend greatly on the main city for almost everything, from work to doctor appointments. In São Paulo, for example, the subway only covers the city limits, so passengers coming from bordering cities must take the train to make the connection to the subway.

While the subway in São Paulo presents modern stations (as it is the case of Line 4 – Yellow, with its driverless technology) and is mostly owned by the state, the train system is not so fortunate. Overcrowded stations with old and slow trains dating from the mid 70’s are a portrait of the railway system in Brazil.

Over the last two years some measures have been taken to change the railway system in São Paulo, with modernization of the trains and stations, but it still is possible to find train stations made out wood and even the most modern of the train stations occasionally suffers from poor electricity supply, especially during the rainy season.

Railway for cargo transportation

The Brazilian railway system is mostly concentrated in the Southeast of Brazil with only 8% of the railroads present in the North and Central-West regions. The most commonly goods transported by trains are grains, steel products, wine, water, stones and cement, with iron ore alone being responsible for 74% of the transported items.

The main problem for the railway system in Brazil is the fact that it was primarily built to export commodities and not to promote integration between the isolated areas and the main centers. The direct result was the bankruptcy and obsolescence of some railroads when some goods ceased from being produced.

Another problem is that in many Brazilian cities cargo transportation shares the same tracks as the trains used to transport people. For this reason, transportation is usually made at night, between midnight and 4h30 a.m, when the train stations are closed for passengers.

Current hurdles

Apart from the deplorable situation of the Brazilian railway system, there are also some specific issues that prevent investments in the area. Two of the most important are the reduced number of routes and the low operation speed, as in some areas the tracks have been invaded by local communities, what forces trains to operate at 5km/h when they could operate at 80km/h.

Also, the construction of new routes and the renovation of the current existing ones require the removal of thousands of families who live close to the tracks, what ends up pushing investments away.