Open World Conference of Workers

In Defense of Trade Union Independence & Democratic Rights

The problem of transportation has to be understood in the light of what it means for the Economy and for Social Welfare and for the very Sovereignty of the country.

The immediate consequence of the transportation policy of each country is its matrix of transportation, which is reflected through its distribution modal, its realities and rational, as well as the political and economic interests at stake.

A critical analysis of this matrix is, therefore, an essential condition for understanding the transportation systems in the country.

In developed countries the modal distribution maintains equilibrium as much in the transportation of cargo as in the transportation of passengers.

Cargo: Railway 40%, Roadway 30%, Waterway 14%, Other 16%.

Urban: Railway and Subway 60%, Roadway 30%, Waterway 5%, Other 5%.

II-Metro-railway and Urban Roadway Sector

In this aspect we can observe that the urban centers opt for the system of mass transportation with the greatest performance, with the greatest number of passengers for the area occupied, and which has fastest movement time, in addition to using non-polluting energy.

In Brazil the policies adopted in the last eight years of the FHC [Fernando Henrique Cardosa] government, intensified the disordered growth of the cities, reinforced the model of social exclusion by geographic segregation, and through insufficient investments in infrastructure of mass transportation.

The disordered growth of the cities, the incentive for the production and purchase of automobiles, with the immeasurable increase in the fleet in circulation, consolidated a crisis of mobility that is without precedent, and strengthened the policy of urban mobility that is centered on the use of the automobile.

The result in the urban environment is an enormous deficit in investments in infrastructure and in insufficiencies in management, with heavy losses for the population, who in the majority use the system of transportation which is expensive, insufficient, unsafe, or even clandestine.

In Brazil the modal distribution in the urban sector and also in the transport of cargo is contrary to all trends. There is an absolute predominance of roadway transportation over the other modes.

In urban transportation the matrix is configured in the following manner:

Bus 96% - Rail 3% - Other 1%

Analyzing the situation in São Paulo we have:

79% bus - 13% Subway - 8% CPTM

São Paulo is the metropolis which has the greatest percentage of railway transportation, principally through the subway.

As a consequence of this hegemony of the bus system we have frequent traffic congestion, accidents, pollution and externalities which characterize the option for systems of transportation of lower performance in terms of patron attendance and demand for collective movement.

III. The causes of the size of the distortion in our transportation matrix are linked to:

1. Historical factors in a country dependent on and an exporter of prime material;
2.
3. The pressure of the automobile industry for the valuation of roadway transportation;
4.
5. A chronic lack of capital, which favors investments in the roadway, which has a lower installation cost but a much higher social and economic cost.
6.
IV-Railway Sector of Cargo Transportation

In the transportation of cargo, what we can observe is a n excessive concentration of the roadway mode in the movement of cargo, which provokes an impact even on the energy matrix, accumulating costs as much in the production chain as in the distributive chain.

This concentration increased after 1996, with the process of privatization/concession of the railway system of the country (RFFSA and FEPASA) to private initiatives.

In these six years of private operation the participation of the railway mode in the transportation matrix fell from 20% to 18%. If we take out mineral transportation, the participation of that mode revolves around 7%.

This means that in the movement of general cargo in the domestic market, represented by the transportation of industrialized products and goods, the participation of the railway is 7% (and even that, to attend export corridors), versus 91% railway modal.

This situation was seriously worsened post-privatization, causing losses for the production sector as a result of the price of freight and the lack of shipping capacity.

The privatized railways, even counting the facilities sponsored by the current government, did not meet the goals established in the concession contracts:

-They did not carry out the necessary investments;

-They did not reduce the number of accidents;

-They did not increase the transport capacity; and,

-They were not able to alter the focus of the business which has as its priority the attendance of export corridors.

Today what we have as a concrete result of privatization is the increase in the levels of pillage, the fragmentation of the system and the complete disorder of the sector, generating a profound economic downturn which increases costs for Brazil, the technical and legal conditions having existed for a long time, for an expiration to be decreed for the concession contracts, as was recommended by the Court of the Accounts of the Union in 1998.

This situation of crisis is recognized even by the private operators, who seek to pressure the federal government to reformat the contracts (to let them pay the values of the concession and the lease in order to carry out their investments) besides demanding more flexible rules for obtaining financings with the BNDES.

The railroads in their majority are operating as a cost center for the consortia companies, carrying merchandise linked to its areas of business, which segments the sector even further, strengthening the model of export corridors (Railroad of the Steel- Victoria Minas-Carajás, Amapá-all from the Vale de Rio Doce) that today exerts a monopolist role over the system, conglomerating its participation in 17 thousand kilometers of a mesh of 19 thousand, operating 9,100 kilometers directly, including stretches of Center Atlantic Railroad (FCA), the Northeast Railroad Company (CFN), MRS Logistics and Bandeirantes Railroad (FERROBAN), whose objective is to take care of the predominant exportation model which is the interest of the first world.

They act in a market niche consisting of the transport of medium and long distance of high volume loads of low aggregate value (granaries, ores, coal and derivatives of oil).

The other two railroads in installation phase also obey this criterion. The Western Railroad (PR) and the Northern Railroad (TM, MS and SP), can be characterized as true "soy-ducts".

The two railroads that break away from this characteristic are the North-South and the Transnorthern, whose job is to take care of to the domestic market.

This process of privatization was accompanied by a series of policies related to the logistics of operation, as much as in relation to the management of people, where we would highlight:

a) Deactivation of some railroad stretches in all the states, under the allegation of them being uneconomical;

b) Closing of 95% of the railroad stations, relegating an immense patrimony of the Union to complete abandonment;

c) Introduction of innovations in the conduction and traction process of railroad cars, incompatible with the characteristics of permanent tracks and rolling material, thusly increasing the destruction of the received fleet.

In relation to the management of people, we would underscore:

a) Resignations of railroad workers in mass, that today add up to around 11 thousand, being that in 1996 the number of workers in the sector reached 47 thousand. The resignations were made to increase "the levels" of productivity per employee;

b) Increase in the working hours, mainly of machinists who today reach 16 hours daily, given that in some private operators as the Ferroban, ALL, FCA, Logistic MR-S and Vale de Rio Doce, saw the introduction of Mono-conduction, that is, the operation of railroad convoys by only a machinist, what makes the working conditions dangerous, serving to help cause an increase in accidents, along with the increase in working hours that reach up to 16 hours daily;

c) Introduction of contracting out, mainly in the sector of maintenance of the permanent track;

d) Generalized disrespect for the Norms of Protection and Accords and Collective Bargaining Agreements; and

e) Attacks on the more militant union leadership with firings, contract suspensions and transfers.

At the same time, in a well articulated action, the government decreed the process of destruction of the RFFSA, passing all of the accompaniment of the system to the ANTT, which as with all the policies of this government and of others, compromised with the interests of international speculative capital, has functioned as an instrument of consolidation and implementation of this policy which is so disastrous for the interests of the Country, armoring the popular yearnings, also provoking the emptying out of the Ministry of Transportation.

In order to also recoup its capacity of draining, the railroad must modify the focus of its business to be able to recoup the typical railroad cargo that throughout the years have migrated to road transport, such as the agricultural granaries (soy, beans, rice, etc), derivatives of oil, steel products, industrialized products, to develop the use of containers and even minerals of greater aggregate value.

V. Roadway Cargo Sector

The situation of the roadway modal is also extremely complex, with the existence of a series of factors that create obstacles for the multi-modality, the principal of them being the fiscal aspect, with elevated differences among the States and among the various modes.

The overloaded and dangerous highways are not able to reach positive efficiency indexes in cargo transport, generating a waste evaluated at US $150 million dollars annually, and this significantly burdens the costs of Brazilian products, reducing the competitiveness of the Country.

The practice of inter-modality is also prevented by the barriers of state borders, as they end up hindering the possibility of speeding up the transport process. One solution to be studied, which could lead to an increase in operational efficiency, would be the implantation of a single point tax, eliminating the harmful effect of cascade taxes.

Another fact that we can highlight as a vector that contributes to the aggravation of the crisis in the roadway sector, is the super-sizing of the fleets, that ends up generating a great excess of road transport.

In Brazil there exists 1,8 million cargo vehicles, 377 thousand independent transporters and about 10,500 transportation companies disputing a market where free competition reigns.

"Free competition", led to the destruction of the market, where no transporter achieves profits of R$ 200 million per year, and were currently less than ten companies exist that make profits above R$ 100 million.

Ingression into the activity of cargo transport is totally liberated, not depending on concession or authorization, being that the law that created the ANTT simply requires the bureaucratic register of operators with the agency.

As there currently exists a super-sizing of the fleet in relation to real necessities, the immediate result is bellow value freight, which makes the competitiveness of the railroad and the integration of transportation difficult, even for long distance.

This situation leads the major operators to adopt logistics of performance, with the focus centered on short and medium distance transportation, objectifying to optimize costs, which it imposes on the independent roadways in the dispute for long distance passages, composed in their great majority of cargo of low added value, with freights that minimally cover the costs, making the conditions of life and work even more dangerous.

VI. Integration or Competition

In this backdrop, the in-vogue conception of stimulating competition on the basis of the logic of the free market has entered the transport modes in a predatory manner, and has shown itself to be extremely harmful for all those involved directly, and, mainly for the economy of the Country.

The roadway modal has much to gain from the advance of the railroads. With more trucks and more trains, each one will make a specialty of part of the work, allowing for the movement of merchandises over longer distances for lower costs.

The recovery of the railroad modal, with logistics that focus on long distance transportation, without abdicating the transport of the general cargo that has reduced social cost and of greater added value, will increase the demand for the transport of more voluminous masses of merchandises at the points, which without a doubt would highly benefit the roadway transportation mode.

This would create the conditions for the train to carry general cargo, achieving and speeding door to door service, integrating systems, reducing the costs of long distances transfers, and also diminishing cargo robbery.

VII Conclusion

We can conclude that the system of transportation in Brazil is in a chaotic state, with negative implications for all of the modes of transportation; the result of the adoption policies of flexibilization in the past years.

The victory of Lula was a defeat over the model developed by FHC, which applied all of the plans of the IMF and other organizations, which had amplified the asymmetries of the sector.

Without having the pretension to indicate definitive solutions to the transportation problems, we are presenting some proposals that in our view should be adopted by the new government and be promoted by the CNTT-CUT and all of the affiliated entities.

VIII Proposals

- National Transportation Policy that introduces the necessary measures for the installation of multi-modality transport, with the formulation of a new transportation matrix, one that deals as much with cargo as with passengers - urban, of long and medium and distances, giving emphasis to the use of railway, subway, maritime, airway and waterway in a more balanced form;

- Expiration of Contracts: To give meaning to this new national transportation policy, which will have to translate the new national plan for the means of transportation, the CNTT considers the following to be an imperative condition: the decree of the expiration of contracts for railroads concessions, placing them under special administration of the State, which will have to assume its responsibilities of control, planning, financing, management and operation.

- CBTU: Suspension of the program of nationalization/privatization of the CBTU and Trensurb that are to be concluded by the end of the year, considering that States and Cities do not possess the financial resources for the maintenance and expansion of the systems.

- Extinguishing of the ANTT: and strengthening of Ministry of Transportation, that it will be able to fulfill its highlighted role as inductive agent of new public policies, policies which answer the real needs for the construction of a sovereign nation and create the effective conditions for the adoption and implementation of action for:

a) Combating hunger and poverty

b) Agrarian reform

c) Broadening of the tourism industry

d) Job creation

e) Rationalization of the energy matrix

f) Reduction of costs in the productive and distributive chain

- Financing: Consolidation of the National Transportation Fund, with resources derived from the CIDE - Contribution of Intervention in the Economic Domain (which regulated the sole tax on the sale of fuels, and which served among others things to bank the gas subsidies. The government cut the subsidy and the population continues paying the tax. Today we pay 0.28 on each liter of fuel, which means, on average per year, 8 billion that went for the single State fund) - prioritizing interventions in the transportation modes that can balance the matrix. Railway, Maritime, Waterway, among others.

Today, no guarantee exists that the resources of the CIDE, which are tied to the recovery of infrastructure, are placed in the other sectors and particular in the railway. According to Minister of Transportation, the resources estimated at 8 billion Reals, will be applied entirely to the improvement of the road system.

- Passage to the Pacific: Some strategic studies have demonstrated the necessity for Brazil to search for a passage to the Pacific, and break with the exclusivity given to the Atlantic in the last 500 years.

This necessity puts on the strategic projects agenda the importance of the viability of the bio-oceanic corridor Santos/SP to Arica and Iquiue in Chile, which would develop railway transport (Santos-Bauru - Bauru-Corumbá - Corumbá- Cochabamba - Cochabamba - Iquique - Arica), increasing growth in the volume of the yield by around 60%, in relation to the current rate.

The Santos-Arica corridor passes through the Southeast and center west of the Brazilian territory and the Bolivian territory, tying us to the north of Chile, with an expanse of 3.577 kilometers, generating economy, therefore the railway modal has reduced costs in the movement of great amounts of cargo over long distances.

Another important factor that is extremely favorable to this initiative, is the possibility of an inversion in agricultural exportation, today concentrated almost totally in grains, which makes this product less competitive when transported by roadway. It would have the capability to achieve overwhelming growth in the bordering regions, which would prevent the long distance transport of raw material.

In order for these proposals to become effective actions, the Lula government must recoup the capacity of the State for intervention in the sector, adopting the previously stated measures, mainly in relation to the expiration of railroad concession contracts, in order to permit the funding of all of the reengineering of the strategic objectives of the sector.

The challenges are immense, and particularly, we believe that the CNTT-CUT must assume the task of creating the necessary mechanisms so that in fact the debate on transportation policy, and the actions that can be developed, occur in integrated way, and not in a hasty and sectoral manner. If this is done, it will create the conditions for overcoming corporatism and the current limitations, translated in the concentration of urban transit and transportation.

Collegial Leadership Body of the STEFBUMSMT-FNITST-CUT

Itatiba, November 28, 29 and 30 and December 1 of 2002.

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