Congress enacts sections of the Railways Framework vetoed by Bolsonaro

The National Congress enacted 19 items of the Railways Legal Framework that had been vetoed by former president Jair Bolsonaro (PL) in 2021. The rules aim to facilitate private investments in railway transport and guarantee the efficiency of this fundamental sector for the Brazilian economy.

According to the rules published this Monday (16) in an extra edition of the Official Gazette of the Union (see in full), one of the main changes reestablished in the law concerns the preference of current concessionaires to obtain authorizations. This means that these companies have priority for railways within their areas of influence that are available for concession.

This preference is guaranteed for a period of five years, during which concessionaires have 15 days to exercise this right. Bolsonaro had vetoed this rule on the grounds that it could harm competition and drive away potential new investors.

Furthermore, current concessionaires also have the right to seek restoration of the economic-financial balance if there is no adaptation of the concession contract for authorization. This recomposition may include a reduction in the grant value, an increase in the tariff ceiling, the elimination of investment obligations or an extension of the contractual term.

Another point restored in the law is the prohibition on railway companies refusing to transport cargo without valid justification. This aims to ensure the efficient flow of goods and the availability of rail transport for the economy.

The law also establishes documentary requirements, such as technical, economic and environmental feasibility reports, information on the transport capacity of railways, and conditions for interconnection and sharing of railway infrastructure.

One of the most significant financial aspects of the law concerns the destination of non-tax amounts received by the Union from railway operators, such as fines and compensation. At least half of these resources must be reinvested in logistical infrastructure or public transport projects, with an emphasis on state projects.

The complete rejection of the presidential veto remains pending and must be voted on in the next session of Congress, on the 24th. The expectation is that this veto will be overturned, considering the agreement between parliamentarians.