Realistic Planning

Railway concessions and the importance of proper planning

It's almost a cliché to say that "there is no planning in Brazil." But the issue goes beyond simply "not planning."

While reading the recent article in Valor Econômico by journalist Tais Hirata, I came across the topic of renewing concessions for companies like Vale, Rumo, and MRS. The article is clear, presenting all the viewpoints of those involved in this complex situation.

Creating feasible plans and implementing risk controls are essential.

It was thanks to this clarity that I returned to thinking about planning.

According to Taís Hirata, on one side, companies have struggled to fulfill some of their agreed-upon obligations and have sought flexibility. On the other side, the government suggests that the included investments may have been underestimated compared to the gains made by the companies.

It's worth noting that the extensions of concessions will only materialize if 80% of all agreed-upon investments are made by 2027 for Rumo and Vale, and by 2026 for MRS.

This situation is common among clients who seek out RGF & Associados, facing challenges in implementing their strategic planning or growing as expected, mainly due to changes in the assumptions used during planning.

In the mentioned case, currency fluctuations and rising interest rates significantly impact investments in the sector, as most of the technology is imported, and the investments are in the billions.

Undoubtedly, planning is one of the cornerstones of any organization or project.

Controlling risks doesn't mean eliminating them but rather identifying, analyzing, evaluating, and deciding how to manage them. Risk control allows the company to be prepared for adverse scenarios while also seizing opportunities that may arise.

Therefore, creating a feasible plan, with support from those with experience in implementation and mechanisms/monitoring for risk control, is indispensable for fulfilling a plan.

RGF & Associados has experience in creating and implementing the strategic planning of its clients, which sets it apart in developing actionable plans.