Business In Brazil

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Lynn Deaton
Sohmer M.

 

Mr. Bowman and Mr. Arocena:

With the investment capital of one billion dollars, our research indicates that the most successful venture would be to implement a railway infrastructure. Noting that you define success in terms of long term economic profitability, social and environmental progress, and stability our proposal meets and exceeds each of these standards.

The railway network will have two developed systems: a human captial component and an industrial capital component. They will use the same long-transport lines, but have differing destinations. The lines that will be developed will extend from the interior of the country to the East coast and the ports. This will not only create safe, inexpenisive, meathods of travel for the people who wish to live in the periphery of the megatropolisis or the country into the city for work, but will also allow agricultural growth and economic stimulation in the interior of the country.

We plan on initiating the project with a loop connecting the cities of Campo Grande, Rondonopolois, Goiana, Uberianda, and Bela Horizonte with the Port cities of Pananagua, Santos, and Rio de Janeiro. A considerabel developmental flaw of Brazil is the lack of xchange between main agricultural centers. Then next venture will be the extension to the North Eastern territories, but focusing on generating new development centers at key port cities that lie farther north.

This project requires significant up front economic funding but is guarenteed to be utilized immediately and generate forward and backward linkages. In order to create the network, products like steel, rubber, and technology will need to be employed. To keep the system running, labor, train stations centers, restaurants, and fuel will be in constant demand. The Social consequences are remarkable. With a surge of the north eastern population flooding the megatropolisis of Brazil in the past 30 years, the cities have not been able to keep up with development or planning. In addition, due to the countries economic status and recent payoff of the IMF, social development funds are lower than ever. This railway network would not only pull people to the periphery of the city, but also generate work in areas where the airable land was not accessable. Due to the increasing technological advances and amazing ability of the Brazileiros to embrace said technology, applying flex fuel systems in combination with electricity to run our network of train would significantly decrease the amount of pollution generated by car traffic. Whats more, the opportunities to use recycled materials to build the train track infrastructure, like recycled rubber from tires to make the cross beams only adds to its green design capabilities. Due to the demand for a reliable infrastructure and the governments desire to privatize these organizations, the stability and long-term effectiveness of such a venture is guarneteed.

While conducting research and speaking with Brazilian scholars of this subject three areas of concern were brought up and quickly delt with:

  1. Lobbying from car manufactoreurs and asphalt companies
  2. Corruption in government: the selling of land around current infrastructure
  3. Purchasing power of an independent organization; How does an independant company aquire the vast amount of land needed for such a project?

They were quickly over come with the following ideas:

  1. Present contracts to car manufactoreurs to supply train engines and carts. They would need to adapt their current technology. This bid would be shared among car companies using the City of Curitiba´s bus system as an example.
  2. Just as land around highways are valuable, so too is the land aroud a train train. The main difference is that the train track condences the profitablity into a smaller areas but with greater value. We know how the rich just want to get richer- this is how. We would sell off specific plots of land where the train stops and create mini-cities. They would be similar to the current bus stops along the highway, but would need to include hotels, banks, post offices, doctors offices, and everything neccissary for a small town to run on.
  3. Because this is a social and environmental project as well as an economic venture, the government of Brazil will be a close consultant. As we are positively increasing the value in both areas the government will be a main investor and will also allow us a monopoly on the land that lies under our proposed track system. We will pay the national standard for the land that is necissary, but, like the development of a road or tollway, their won´t really be a choice.

 

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