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By Alberto Alerigi Jr. and Guillermo Parra-Bernal
SAO PAULO (Reuters) - A group of 22 companies led by South Korea's Hyundai Heavy Industries plans to bid for the right to build and operate a high-speed rail link in Brazil, even as the government...
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By Alberto Alerigi Jr. and Guillermo Parra-Bernal
SAO PAULO |
Fri Nov 26, 2010 2:28pm EST
SAO PAULO (Reuters) - A group of 22 companies led by South Korea's Hyundai Heavy Industries plans to bid for the right to build and operate a high-speed rail link in Brazil, even as the government might delay the process.
Consorcio TAV Brasil will tender its proposal on November 29, when bidding for the bullet train project opens officially, according to a statement issued on Friday. Partners of TAV Brasil include LG CNS Co, Samsung SDS and Brazilian construction group CR Almeida.
The group's announcement comes after local media reported on Friday that the Brazilian government could delay an auction to pick a winner to allow for a broader debate on the project's cost and necessity. The auction for the buller train plan could Brazil's largest ever.
The venture, which could cost about 33 billion reais ($19 billion), has drawn criticism from Brazil's budget watchdog because the government has promised large subsidies to the winning bidder. A winner will be unveiled on December 16.
"TAV Brasil already has the bank guarantees that are necessary to participate in the bidding," the group said in the statement. Bidders will have to deposit 340 million reais as a guarantee to participate in the auction.
According to Valor Economico, potential bidders balked at the short notice for the auction next Monday. Insufficient debate over the bullet train plan, one of President Luiz Inacio Lula da Silva's flagship infrastructure projects, could make executing it harder for the winner, the newspaper said on Friday.
Bernardo Figueiredo, head of Brazil's regulator for the transport industry, will meet with investors on the project later on Friday, according to the agency known as ANTT.
Currently, Consorcio TAV Brasil and a Brazilian group could bid in the auction, Valor said.
The winner will get a 40-year permit to run the train. Lula says the train and other big infrastructure projects sponsored by government credit are key for Brazil to sustain annual growth rates above 5 percent a year this decade.
The sleek bullet train running between Sao Paulo and Rio de Janeiro at 280 kilometers per hour (174 miles per hour) is the image of a modern and thriving Brazil that Lula and his successor, President-elect Dilma Rousseff, want to project.
Transport Minister Pedro Passos will announce the decision to postpone the bidding later on Friday, Valor reported. The ministry's media office was not immediately available to comment on Valor's story.
($1=1.736 reais)
(Reporting by Alberto Alerigi Jr. and Guillermo Parra-Bernal. Editing by Robert MacMillan)
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