Forging disconnected bits of rail into a single-gauge network is aimed at reducing the continent-sized country's dependence on more costly road transportation, said Bernardo Figueiredo, head of the state-run Planning and Logistics Company, known as EPL. Currently, only about one-third of Brazil's 28,692 km of railway are in operation, and 30 percent of freight moves by rail, compared with 52 percent by truck.

The bulk of the rail network operates under concessions the government grants to companies. The operators can prevent anyone else from using their lines.

The railway projects are part Rousseff's efforts to speed up the modernization of Brazil's infrastructure by attracting private capital. New roads, railways, ports and a high-speed train will require investments of 242 billion reais, according to EPL.

"Logistics in Brazil are inverted - we use roads for long-haul and railways for short-haul," Figueiredo. "That's what undermines the competitiveness of our productive sector."

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