UPDATE 1-Brazil delays high-speed train bids for at least a year

Mon Aug 12, 2013 6:57pm EDT
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By Leonardo Goy

BRASILIA Aug 12 (Reuters) - Brazil's government put off bidding for a high-speed train project for at least one year because there was only one confirmed consortium competing for the 38 billion reais ($16.7 billion) deal, Transport Minister César Borges announced on Monday.

Lack of competition led the government to postpone the tender for the bullet train linking Brazil's two largest cities, Sao Paulo and Rio de Janeiro, after Spanish and German groups guaranteed that they will bid if given more time, Borges said at a news conference.

After massive protests against corruption and misuse of public money paralyzed Brazilian cities in June, the government preferred not to open itself to further criticism by awarding the bullet train contract to the one bidder, analysts said.

Officials said only one group led by France's Alstom SA and including state-owned railway company SNCF Group was ready to present their bid by Friday's deadline.

Borges said the postponement was to increase competition and not related to an anti-trust investigation of foreign engineering companies over alleged price-fixing in building and maintaining railway and metro lines in Brazil.

Alstom and Germany's Siemens AG, which leads a consortium looking to build the high speed train, have said they are cooperating with Brazilian authorities probing a possible cartel that colluded to win contracts between 2004 and 2007.

The 260-mile (420-kilometer) high-speed rail link is at the heart of a $100 billion investment plan by President Dilma Rousseff to upgrade Brazil's roads, railways, airports and port through private concessions. The bullet train project has suffered a series of delays and cost revisions in recent years.   Continued...