Brazil to put R$3.6bn into Malha Oeste railway before 2027 auction

Brazil's federal government plans to put up to R$3.6bn of public money into the Malha Oeste railway, which runs from Corumbá on the Bolivian border to Mairinque near São Paulo, to make a new concession viable. The tender notice is due in April 2027 and the auction in August 2027, the Ministry of Transport said.

Transport Minister George Santoro presented the timetable at the B3 stock exchange in São Paulo on 15 October, according to the Campo Grande daily A Crítica. The R$3.6bn would come from the federal budget, as set out in the line's feasibility study, and would be paid in instalments of no more than R$500m a year. At that ceiling, the payments would stretch over at least eight years. A regional infrastructure fund, the FDIRS, would act as a guarantee for investors.

The concession plan estimates up to R$29.1bn of investment over a 57-year contract in its most complete scenario. That is about 19% less than the R$35.7bn put forward in November 2025, a cut A Crítica links to the search for bidders. Three scopes are on the table: the full Corumbá–Mairinque line, a shorter Corumbá–Bauru option, both eligible for federal money, and a Corumbá–Três Lagoas section within Mato Grosso do Sul that is not. A branch from Campo Grande to Ponta Porã is optional, at the winner's own risk.

The line has been run by Rumo Logística, whose 30-year concession ended on 30 June 2026 and was followed by a 180-day transition agreement. The last commercial train ran in Corumbá on 1 December 2025. The dates still depend on the federal audit court, the TCU, whose approval the minister expects in November.

The public money matters because much of the line has to be rebuilt before freight can come back. Malha Oeste is metre gauge, narrower than the broad-gauge Malha Norte, so freight must be transferred between the two networks. On a long single-track railway, the tonnage a concessionaire can sell depends less on new locomotives than on passing loops, train length and the state of the track. Spreading R$3.6bn over eight years or more also means the winner is likely to finance the heaviest early repairs itself, with the state paying back over time.

Malha Oeste is one of 18 rail projects worth an estimated R$160bn in the ministry's 2027 pipeline, including eight concessions and nine authorisation calls. Brazil's development bank BNDES is offering loans of up to 40 years for them. The last federal rail concession auction took place in April 2021, Poder360 notes. The first test comes sooner: the 733 km Minas-Rio corridor is due to go under the hammer on 17 December.

Sources: Campo Grande News, citing the Ministry of Transport (16/10/2026); A Crítica de Campo Grande (16/10/2026); Poder360 (15/10/2026).

Photo: Rafael Deminicis, CC BY 4.0, via Wikimedia Commons

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