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São Paulo: Metro Delays Worsen Transit

A bidding scandal to extend Sao Paulo's beleaguered transit system is delaying needed improvements.

Latin Trade Magazine


SÃO PAULO  — A bidding scandal has presented the latest delay for a needed extension of the São Paulo subway, a key project already moving at a snail’s pace.

The extension of subway line No. 5 has been scheduled for completion before the 2014 World Cup in order to alleviate the over-burdened public transport system in the business and financial capital, which will host a number of key matches.

But in October, authorities were acutely embarrassed when Brazil’s largest newspaper, the Folha de São Paulo, revealed it independently learned of the winners of the bid six months before the official announcement. The publication had filed this knowledge with a public registrar in April to authenticate its allegations that the bidding had been fixed. After Folha published its story, São Paulo state government officials promptly canceled the $2.3 billion (4 billion reais) awards to various groups, including a consortium of two privately held construction companies, Odebrecht and Construtora OAS. Authorities also postponed the tender pending an investigation.

The consortium of Odebrecht and OAS has denied any impropriety and defended the bidding process, issuing a statement noting that “only two groups had the required equipment” required for that stretch of the subway line. Odebrecht has long been involved with the metro and scores of other transportation projects.

Half a dozen contracts were to have been awarded for the subway expansion, which would offer some relief to São Paulo, home to traffic jams that turn a trip to the airport into an hours-long journey. The existing subway debuted in the early 1970s and is considered modern and relatively efficient, carrying an average of 2.1 million paulistanos every day. Since that debut, only one new line was added to the system, traveling under Avenida Paulista; otherwise, expansion has been limited to stations along the existing lines.

Four years ago, the state government signed a public-private partnership with a consortium known as Via Quatro, which is led by the private infrastructure group Companhia de Concessões Rodoviárias (CCR). The Via Quatro group was awarded a 30-year concession to manage the new subway line, during which time it is expected to invest $2 billion. As of year-end, the Via Quatro consortium was operating only a short stretch of the line along Avenida Paulista and Faria Lima on an experimental basis. It is scheduled to formally take over in 2013.

Despite an ambitious urban transport plan unveiled by the São Paulo state government in mid-2009 that called for $13.5 billion (23 billion reais) in investments by the end of the past year, major areas of the city are still left out.

The new business districts of Berrini and Vila Olimpia each have train stations with links to the suburbs but none to the São Paulo subway. Construction of subway line No. 4 has been delayed since a deadly construction site collapse in 2007 that killed seven people.

Another major challenge in the city is the lack of easy transportation between the domestic and international airports, causing lengthy commutes for connecting passengers. Successive administrations have repeatedly proposed and shelved plans to address this problem.


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