Brazil's TCU approves agreement for FTL to return railways to Union

The Brazilian Federal Court of Accounts (TCU) has approved an agreement with modified terms for Ferrovia Transnordestina Logística S.A. (FTL), a CSN Group company, to return 3,014 kilometers of non-operational railways to the Union. As part of the settlement with the National Land Transport Agency (ANTT), FTL will recognize an indemnity of approximately R$ 1.785 billion owed to the government.

The agreement, which aims to avoid prolonged judicial disputes, stipulates that the payment and fulfillment of major obligations are tied to the future extension of the concession scheduled for 2028. FTL will also be responsible for infrastructure decommissioning, environmental and land regularization, geographic mapping, and R$ 136.28 million in investments to mitigate conflicts between the railway and urban areas.

To mitigate risks, the TCU mandated several changes to the original text. These include a prohibition on using indemnity funds or converted fines to cover maintenance services that were already the concessionaire's responsibility. The court also required a detailed schedule for works and expenditures, as well as the establishment of penalties proportional to any breaches, which could lead to the full collection of the indemnity.