Everyone suffers from high interest rates, says CEO of Rumo – 06/16/2023 – Market

The director-president of the logistics operator Rumo, João Alberto Fernandez de Abreu, said that the interest rate of 13.75% per year is high and that the whole country suffers from it. The executive, however, stated that he prefers to leave the debate to Central Bank technicians because he sees risks with an eventual acceleration of inflation.

“The interest rate is very high, of course, everyone suffers from it. Private capital, which needs to raise money to make these investments, pays a much higher bill”, he says to Sheet. “Now, there are technical people evaluating this. It is much more expensive for Brazil, a country with inflation”, she said.

The interview took place in Rio Verde (GO), where Rumo would inaugurate the final section of the North-South railroad in the presence of President Luiz Inácio Lula da Silva (PT). The event was postponed, still without a new date, because the presidential plane would not be able to land in the city of Goiás due to weather conditions.

With the completion, the railroad now has 1,537 kilometers of tracks between Estrela D’Oeste (SP) and Porto Nacional (TO), which pass through four of the five regions of the country. With the stretch operated by another company, VLI, the length of the North-South road reaches 2,257 kilometers.

Norte-Sul is a railroad whose history has been going on since the 1980s and which has now finally been completed. According to the executive, the network now covers both exports and the domestic market in a comprehensive manner for a wide range of products.

“We are not going to stay here simply focused on grains, talking here mainly about bran, soy, corn. It opens up a lot of opportunity for general cargo, especially with Anápolis, which is the third largest industrial center in Brazil in imports and exports”, he said.

He claims that the company, for example, is preparing to inaugurate a fuel operation. Goiás is the third largest producer of ethanol and biodiesel in Brazil and the company’s trains can take cargo to the main consumer center, which is the São Paulo market, and return with gasoline and diesel.

According to him, R$ 4 billion were invested both in the railroad and in terminals by Rumo and its partners. Much of the infrastructure found on the railroad was replaced by the company. In addition, all rolling stock has been purchased by the company over the past three years.

“We are talking about 37 years to complete a work. In 37 years, things go through a process of deterioration and it is normal. So, what was not in the right state was registered, sent to the regulatory agency and changed, so that the operation could walk. Today the entire railroad is in perfect condition”, he says.

In addition, the company has made contributions to other railway networks under its management, such as São Paulo and Mato Grosso. “We now need to focus on executing what is already on paper, in the pipeline [lista de projetos] signed. At this time, we have no plans to do new railways other than the ones we are focused on,” he said.

He claims that the country’s scenario for new works requires public resources in most cases, although private companies manage to carry out projects in general more quickly.

“There are a number of other things, mainly linked to urban mobility, which, if the government does not come with resources, it is very difficult for us to be able to offer society”, he says.

On the eve of the government launching the new PAC (Growth Acceleration Plan), the executive also states that infrastructure investments should be seen as State policies, not government policies, and he points out that it is necessary to observe the risk of the various projects overload the supply of labor and companies in the country.

“A warning that we make is also to evaluate what is already hired. There is a lot to be done, and we need, mainly, qualified labor”, he says. “So, it’s important to look at new projects, but be careful not to place them within a system that is already full and needs qualified people, engineering companies, for them to be executed”, he says.

*The journalist Marcelo Toledo traveled at the invitation of Rumo.