Technical study confirms feasibility of $7.7bn Brazilian hyperloop project

Technical study confirms feasibility of $7.7bn Brazilian hyperloop project

A technical study presented on Thursday by the government of Rio Grande do Sul state in southern Brazil confirms the technical and commercial feasibility of a hyperloop project to transport people and cargo via high-speed vacuum capsules across four cities.

The technology is developed and licensed by California-based company Hyperloop Transport Technologies (HyperloopTT).

The hyperloop concept is a transport system originally conceived back in the 18th century and revived by Tesla CEO Elon Musk around a decade ago. It consists of capsules that float on rails using magnetic levitation, following paths inside vacuum tubes.

The feasibility study in Rio Grande do Sul analyzed the first 30 years of operations of such a hyperloop system, including an estimated five-year construction and implementation period.

The design proposed would connect the metropolitan regions of capital Porto Alegre and Caxias do Sul, with stops at underground stations in Novo Hamburgo and Gramado.

The 137km journey would be made in less than 20 minutes (compared to two hours by car), with passengers and achieving maximum speeds of 835km/h, according to the study.

The total cost of the system is estimated at US$7.71bn, of which US$3.81bn would be construction capex, US$2.02bn for operating costs and US$2.52bn for taxes. The passenger fare was proposed at 100 reais (US$19).

Of the outlined construction capex, US$2.6bn is projected for overall infrastructure, US$140mn for the fleet of capsules, US$390mn for building the stations and US$5mn for land acquisitions.

The 250-paged technical report was developed by the production and transport engineering department at Universidade Federal do Rio Grande do Sul (UFRGS). It includes topographic analysis, passenger demand, cargo demand, energy need, economic analysis and financial analysis, as well as expropriation costs, the price of tunnel construction, among others.

“This is the first hyperloop study in Latin America,” said Ricardo Penzin, head of HyperloopTT in Latin America, during the presentation. The event was attended by Rio Grande do Sul governor Eduardo Leite, among other officials, 

PARTNERSHIPS

HyperloopTT would not build or operate the system, but instead license the technology, provide consultancy services and oversee the project implementation. 

“We’re a technology company that connects to other players. Our model is fully based on partnership,” Penzin told BNamericas in an interview prior to the presentation of the study.

The partner for the construction of the capsules is currently the Spanish firm Carbures, formerly called Airtificial, but Penzin says that the Brazilian aircraft maker could be a potential partner for the manufacture of the capsules in Brazil and for Latin America. 

In addition to Embraer, HyperloopTT is in talks to Airbus, the executive said in the interview.

HyperloopTT is not the only company working on hyperloop projects. Spain-based Zeleros, also develops a scalable hyperloop transportation system and recently announced AccionaCAF and EIT InnoEnergy as partners in the development of its projects.

Founded in 2013, HyperloopTT has not developed any commercial project as yet. 

The first commercial prototype will be launched in 2023 in the United Arab Emirates, and will connect Abu Dhabi and Dubai over a 170km journey taking approximately 10 minutes.

The company has a full-scale testing system at its European research and development center in Toulouse, France.

HyperloopTT has offices in Los Angeles, Barcelona, Toulouse, Dubai and São Paulo.

“We’ve also have very good talks in Uruguay and Argentina,” Penzin told BNamericas, without giving any further details.

According to Penzin, the next step is taking the Rio Grande do Sul study to investors. 

The executive stated during the presentation that at least two investors have already shown solid interest in the project. HyperloopTT is mainly looking for logistics operators and investment funds.

The construction of the hyperloop in Rio Grande do Sul is estimated to take five years. The technical report projected the creation of 50,000 direct jobs in the construction stage. 

HyperloopTT has also started talks with companies in the energy sector in Brazil, Penzin said, as the project relies on supply via solar energy, which would come from panels to be installed along the route.

The technical report states that the Rio Grande do Sul system could reduce CO2 emissions by 95 million tons over 30 years.

The system is projected to begin generating profit within 14 years and would be “self-financing”, not depending on public contributions or tax incentives. The government’s role would be only in procedures related to environmental licensing.

“When you talk to logistics operators and investment funds and show the investment returns it offers compared with other modes of transport, they want to know, to understand better, because they are used to having ROIs in this segment in 30, 40, 50 or even 100 years – and using subsidies” Penzin told BNamericas.

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