Brazil Railroad Closes

The government finally shut down its defunct RFFSA rail network after five years’ effort, opening the way for privatized operators to increase investments to eliminate critical transportation bottlenecks. The government began privatizing RFFSA piecemeal in 1996, but failed to insulate private operators from $1.1 billion in contingent legal liabilities. The government has now transferred the agency’s liabilities to a federal fund, removing further legal risk. Operators invested $700 million last year, despite these uncertainties.