Mitsui and Odebrecht create JV for rail PPPs in Brazil
Mitsui & Co., Ltd. has signed agreements with Odebrecht TransPort S.A. on November 6, 2014 to establish a joint venture company to promote concession and public-private partnership (PPP) projects concerning urban passenger railway transportation.
After completion of necessary procedures like obtaining permission from Brazilian Fair Trade Commission, Mitsui, through a newly established special purpose company, will acquire 40% of the joint venture shares by the end of December, 2014 by subscribing new shares of the joint venture amounting to approximately BRL 500 million (US$195.6 million).
Odebrecht TransPort, a subsidiary of a Brazilian major conglomerate Odebrecht S.A, operates various transportation infrastructure including passenger railways, highways, airport and ports in Brazil.
Assets of the JV are composed of suburban railway in Rio de Janeiro, which is under operation, subway line No.6 in São Paulo and Goiania light rail transit and the light rail project in Rio de Janeiro, which are under development or construction. In addition, the development of new PPP projects in major Brazilian cities as well as investment will be made through this JV.
Odebrecht TransPort's assets
| Suburban railway in Rio de Janeiro ("SuperVia") | Subway line No. 6 in São Paulo ("SP6") | Light rail transit in Rio de Janeiro ("Rio LRT") | Light rail transit in Goiania ("Go LRT") | |
| Scheme and Operation period | Concession1998-2048 | PPP2014-2039 | PPP2013-2038 | PPP2014-2050 |
| starting operation | Under operation | 2020 | 2015 | 2017 |
| Share of Odebrecht TransPort | 60.0% | 19.6% | 24.9% | 90.0% |
| System and length | Suburban line270km | Metro15.3km | LRT28km | LRT14km |
| Stations | 102 | 15 | 46 | 17 |
| Trains | 197 trains | 23 trains | - | - |
| Capacity(thousand passengers/day) | 1,700 | 1,000 | 285 | 240 |
| Total investment(2014-2020) | BRL 1.5 billion | BRL 12.2 billion | BRL 1.5 billion | BRL 1.7 billion |
Mitsui has built up vast experience in export of rolling stock and railway system including signaling system as well as engineering, procurement, and construction (EPC) projects since the 1960s, and also has been operating freight car and locomotive leasing business in the United States, Europe, Brazil and Russia since the 1990's. Furthermore, in 2014, Mitsui participated in the general cargo rail transportation business in Brazil. As for concession/PPP business of passenger railways, Mitsui participated in São Paulo Subway line No. 4 PPP in 2007, which started commercial operation from 2011; however, this JV is the first full-scale participation for Mitsui in this business field.
Through this JV, Mitsui will contribute to the development of urban mobility infrastructure and a stable and safe passenger transportation system, which are urgent issues in Brazil and will enhance the value of the JV by introducing technology and knowledge of Japanese passenger railway operators and manufacturers. In addition, Mitsui aims to participate in concession/PPP projects in other countries in the future by utilizing our past experience and the expertise to be accumulated in this JV.
