Ferrovia Centro Atlantica S.A.

active

In June 1996, Ferrovia Centro Atlantica (FCA. or Tacuma Consortium) won a 30-year concession to rehabilitate and operate 7,080 km of railway line in the central-eastern region of Brazil. In 1995, the Brazilian government decided to divide the national railway, RFFSA, into six exclusive regional systems and to offer a 30-year concession contract for each system. This was one of the six concessions awarded between March 1996 and July 1997. Concessions were awarded on the basis of the highest bid above the government's minimum price. Concessionaires must pay an upfront lump sum, and a stream of pre-determined payments over the life of the concession. Unlike in Argentina, concessionaires have no control over initial employment decisions. The FCA consortium is headed by CVRD, which holds 45.6% of the shares throught its subsidiary Mineira Tacuma; the remaining private sponsors hold less than 15% of the shares. FCA paid R$317 million for the concession (approximately US $305 million), and will invest an US$ 300 million during the first five years of the concession. The consortium has committed to investing R$900 million over the life of the concession. In December 2000, BNDES approved a US$ 125.3 million loan to FCA, which will invest the funds in rehabilitating the rail assets. In 2003, CVRD acquired Cia Siderurgica Nacional's stake in FCA. As of December 2003, CVRD was holding 99.99% of the total shares of FCA. Between 2004 and 2006, CVRD directed US$ 488 million to FCA. Between 2009 and 2012, additional US$ 817 milllion was directed to the company's infrastructure. As of 2007, Ferrovia Centro Atlantica S.A's shares were traded on the Sao Paulo Stock Exchange Bovespa. In January 2006, ANTT approved an 165-km long extension of FCA's railway. In October 2008, The project was expected to require an investment of US$ 935 million from Vale, but approval for the construction works commencement had not been granted yet. In November 2009, construction works were set to start in the first half of 2010. The investments undertaken by FCA, year by year were: 1997 – US$ 44 million (R$ 49.2 million) 1998 – US$ 49.4 million (R$ 59.6 million) 1999 – US$ 10.2 million (R$ 53.9 million) 2000 – US$ 46 million (R$ 89.8 million) 2001 - US$ 64.6 million (R$ 143.8 million) 2002 – US$ 21.3 million (R$ 75.3 million) 2003 - US$ 38.6 million (R$ 115.8 million) 2003