For the first time since the 1990s privatization of RFFSA, Brazil will take back a rail concession. Rumo will return the Malha Oeste, nearly 2,000km long, by the end of 2025. The Malha Sul will follow in 2026. The company has already booked about R$5bn in regulatory credits tied to the Oeste, though much remains under dispute.
Concessions were meant to deliver efficiency and private capital. Instead, parts of the network became stranded assets. The “fillet” — mineral loads from Corumbá and pulp from Três Lagoas — comes with plenty of “bone”: near-idle stretches in São Paulo, costly to maintain and with little cargo.
To attract bidders, the transport ministry is considering a phased auction that would force investors to chew bone for every slice of meat. Globally, this is nothing unusual: in Europe, subsidies keep unprofitable lines alive; in the US, Amtrak survives on federal funding for routes freight companies ignore.
The risk is that Brazil’s experiment only adds complexity. The estimated R$18bn in capital expenditure — including R$8.8bn for track modernization — looks heavy against weak demand. Carving the network into smaller packages may fragment operations further and leave strategic corridors exposed.
The first rail return since privatization shows concessions are only as good as the cargo they carry. On Brazil’s railways, the steak never comes without the bone — and the cut is what matters.
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