The railway line crossing Bahia faces three stages of structural work; progress slowed by the impact of Russia’s invasion of Ukraine
11/24/2025
Even from 18,000 kilometers away, the war between Russia and Ukraine has stalled construction of the West-East Integration Railway (FIOL) in Bahia. In April, Bahia Mineração (Bamin)—the company responsible for building the line—suspended work on Section 1, which connects Caetité to Ilhéus. The company, controlled by the Eurasian Resources Group (ERG) and headquartered in Kazakhstan, has been heavily affected by the war’s economic fallout.
“Unfortunately, Bamin faced a serious problem due to the war and ran out of resources to carry out [FIOL 1]. The government is treating this matter as a priority, and I believe it will be resolved,” said Jorge Bastos, president of Infra S.A., at a Valor event in late October.
Bamin declined to comment. However, at the end of October, company president Eduardo Ledsham addressed the issue during the opening of Exposibram, a mining congress held in Salvador. He confirmed that the company had been hit by the economic repercussions of the conflict and has since been seeking ways to raise the R$5.7 billion required to resume construction.
“We are working with three concrete proposals [from potential investors], all interested in an integrated project—the mine, railway, and port,” said Mr. Ledsham, noting that about R$4.8 billion is already secured through federal government credit lines. The remaining funds are expected to come from a new partner in the venture.
The linchpin of the plan is the completion of FIOL 1, which, although currently suspended, is 62% complete, according to Mr. Ledsham. The new investor should be confirmed by early next year. However, the partnership’s restructuring will require renegotiating the concession contract, as the company has requested an extension of the completion deadline from 2027 to 2031. “It’s a natural process. A project of this scale demands adjustments to timelines and responsibilities, always in dialogue with the Ministry of Transport and ANTT [National Land Transport Agency],” said the executive.
Both Bamin and the federal government view the integration of rail logistics, agribusiness, and mining as key to the Northeast’s economic transformation, linking the railway to other logistics corridors. Alongside FIOL, the Porto Sul project in Ilhéus, still on the drawing board, is seen as a strategic hub that could reduce freight costs by up to 40%, according to Mr. Ledsham’s estimates.
Bamin owns the Pedra de Ferro mine in Caetité, which has an annual production capacity of up to 2 million tonnes of high-grade iron ore (65% concentration)—a level that draws intense interest from international buyers. However, the company’s ability to export depends on the completion of the FIOL railway, the essential link between the mine and export terminals.
According to Infra S.A. president Jorge Bastos, completing FIOL is strategically important because it connects mineral and agricultural production to the port system. “FIOL 2 [Guanambi-Caetité] is now in full swing. We’ve resolved most of the bottlenecks and are putting nearly all sections out to tender to complete construction as quickly as possible,” Mr. Bastos said.
Despite this optimism, an audit by the Federal Accounting Court (TCU) has identified “significant delays” in project execution. “After nine months of work—out of a total contract term of 26 months—only 3% has been completed, with no executive project approved and no construction stages initiated. This represents delays of nine months for design and four months for construction,” the court reported in October.
The TCU cautioned Infra S.A. that failing to take action against contractors who are not meeting deadlines or contractual obligations could constitute an oversight by the agency itself. However, it also recommended that each case be assessed individually. Currently, half of the 485 kilometers that make up FIOL 2 already have tracks installed.
Meanwhile, FIOL 3, covering 840 kilometers between Mara Rosa (Goiás) and Correntina (Bahia), remains in the planning phase. All FIOL sections are part of the East-West Railway Corridor, a project deemed strategic by the Ministry of Transport. The plan is to link FIOL with the Midwest Integration Railway (FICO) to create a logistics corridor for grain and ethanol transport from the Midwest to the Northeast and to international markets.
The Ministry of Transport expects to launch the bidding process for the corridor’s concession in the first half of 2026.
*By Marina Lang — São Paulo
Source: Valor International
https://valorinternational.globo.com/