The MPF says the government has not yet established the High-Speed Rail Transport Company (Etav), which will be used to channel state funds worth up to Reais 3.4 billion ($US 2 billion) to help finance the Reais 33.1 billion project.

The MPF also wants the tender to be suspended until new licences are granted to inter-state and international bus operators in Brazil. "Without proper granting of road passenger licences, we cannot guarantee the adequacy of the high-speed train feasibility studies which were based on the current prices and conditions for the bus operators between Campinas and Rio de Janeiro, and which could change significantly," says the MPF.

The MPF also calls for measures to correct what it describes as "irregular use of arbitration in the concession contracts" and to ensure the competitiveness of the tender.

The invitation to tender was originally issued in December, but was postponed until April 29 to allow more bidders to enter the process. At the end of last year, only a Korean-Brazilian consortium had declared its intention to bid.