Keywords: transaction costs economics, privatization, governance structure.

The transformations that occurred after the privatization of the railway sector in Brazil and after the creation of a regulatory agency have caused the change of the governance structure of this sector. The new form of coordination in which railroads are established may be evaluated using an analysis of transactions costs. This paper identifies the existence of transaction costs in the railway system and the creation of a transaction cost index, by assessing its governance structure. In the current study described in this paper, the transport of four major Brazilian agricultural products is considered: a) soybean grain; b) non-genetically modified (non-GMO) soybean meal; c) sugarcane; and d) alcohol. The dimensions of the transactions analyzed were asset specificity, frequency and uncertainty. The results indicated that the highest TC index was achieved for non-GMO soy meal and alcohol. However, the values of the variables measured for asset specificity for all the products reached values ranging from medium to high. From these it is concluded that the railway sector transaction costs are high and have led to the adoption of new strategies and forms of governance which can mitigate the risk associated with the transactions, i.e., the emergence of long-term contracts and partnerships.

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