German companies interested in train crossing South America: Officials

LA PAZ - Reuters

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Dozens of German companies including Siemens attended meetings in Bolivia this week to discuss building a coast-to-coast railway through Brazil, Bolivia and Peru that could speed up the export of corn and soybeans to Asia, German and Bolivian officials said on March 22.

The massive, $10 billion project would involve building a 3,700-kilometer (2,299-miles) rail line across the continent, linking the Atlantic and Pacific oceans, through mountains and jungles.

“This is the project of the century,” said Germany’s State Secretary of German Transport, Building and Urban Development Rainer Bomba.

Representatives from Brazil, Peru, Paraguay, Uruguay and Bolivia as well as Germany and Switzerland are still studying the feasibility of the train route, which would drastically shorten shipping routes from Brazil’s coast to Asian markets for key commodities.

Siemens, Europe’s top engineering group, participated in the meetings “to get more information about the project,” spokesman Dennis Hofmann said in an email.

“The project is at an early stage and questions have to be clarified,” he wrote.

The discussions, on March 21-22, come after a similar, Chinese-led project build a trans-South America railway ran into roadblocks late last year due to cost and environmental concerns.

Bolivian and German officials did not name other companies that attended the meetings, but Bomba said:
 “The presence of 40 German companies here demonstrates that Germany is not only in the planning phase, but also in the realization phase.”

Bolivia’s Public Works Minister Milton Claros told Reuters Bolivia and Germany had signed agreements for technical assistance and financing for the project. The ministry said the project would connect the Brazilian port of Santos to the Peruvian port of Ilo and had a preliminary cost estimate of $10 billion.

Brazil is expected to export 28 million tons of corn and 61 million tons of soybeans in the 2016/17 crop year according to the USDA. It is the world’s largest soybean exporter and second-largest corn exporter.

China and Peru agreed in 2015 to study a 3,000-mile-long railway through the Andes, but Peru balked when China estimated its cost at $60 billion. Peru’s President Pedro Pablo Kuczynski later said the rail should go through Bolivia.

Land-locked Bolivia has long pined for a corridor to the Pacific, blasting Chile for taking its coastline in a war in the late 19th century and maintaining its Navy on Lake Titicaca.

Brazil had also questioned the Chinese project and would likely back the Bolivian route, a member of the Brazilian delegation said.

“We identified problems in the reports made by the Chinese group. We communicated the points of disagreement to Chinese authorities and we are seeing how we can continue the studies,” said Joao Carlos Parkinson, coordinator of economic affairs at Brazil’s Foreign Ministry, who attended the meetings.

Brazil’s Ambassador to Bolivia Raymundo Santos said talks would continue.

“Our delegation confirmed Brazil’s interest in participating,” he said. “The political side has been resolved, but now the technical work has to move forward.”