South America News: Peru, Brazil, China Roll Ahead With Transcontinental Railway

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A train named "The Potato Train" arrives at a station in Lima April 23, 2009. REUTERS/Enrique Castro-Mendivil

Peru, Brazil and China are moving forward on a transcontinental railway that will cut across the Andes and connect port cities in the Pacific and Atlantic coasts of South America, Folhia reports. The agreement was announced during a four-country Latin American tour by Chinese Premier Li Keqiang. The mega rail project will cost an estimated $10 billion dollars. Technical studies are now underway and specific timelines are expected to be revealed in the coming months. The railway is expected to reduce the cost of exporting agricultural goods from Brazil to China, and bring new business to Peruvian ports.

Brazilian grain is a top item on China’s wish list, as are iron and other raw minerals. Agricultural goods like corn and soy currently leave Brazil by boat heading south down the Atlantic coast, rounding the southern tip of Argentina, and heading back up the Pacific coast on it’s way to China. An overland route would shave off a few days from the trip, and lower transport costs by an estimated $30 per ton. That might not seem like much for a $10 billion dollar project, but Brazil exports millions of tons of grain to China each year.

What about passenger trains? Will tourists and migrants be able to ride the rails from Lima to Rio, through the Amazon and over the Andes? Passenger trains are not named in the current proposals, and technical studies of Peruvian railways are just getting started. Studies have been done on the Brazilian side to pick a route and the transcontinental railway is likely to stretch from Port De Açu, in Rio de Janiero, through the agricultural heartland of Mato Grosso, and on to Porto Velho near the Peruvian border. Future studies will determine the route through Peru, but it safe to say that the rail would cross the Andes and end in one of the larger port cities like Lima, Mollendo, or Llo Arica. If passenger trains were allowed to squeeze in between all the corn and soybeans, it would be a very interesting ride.

China has continued to expand its dominance in Latin American trade. It’s become the top trading partner of Brazil and Peru, passing the U.S. in 2009 and 2014, respectively. It’s also a top consumer of Venezuelan oil and a top lender to the Venezuelan government. In addition to visiting Brazil and Peru, Premier Li Keqiang will travel to Colombia -- to discuss more infrastructure projects -- and to Chile, where China has significant interests in copper imports.

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