China Rail puts prohibitive $60bn price tag on transcontinental link

Politicians in South America have balked at the extremely high price tag being suggested by a Chinese firm for a proposed railway cutting through the entire continent.

Martin Vizcarra, Peru’s minister for transport, has said the cost of building the 5,300km rail link would be about $60bn, $35bn of which would be spent in Peru and $25bn in Brazil.

$60bn would make the transoceanic railway one of the costliest civil engineering schemes in the world.

He told Peruvian broadcaster RPP that the cost estimate by China Railway Group took Lima by surprise, reports Reuters.

"With that money, $35bn, we could build a lot of projects to benefit Peruvians," Vizcarra said on RPP.

When the project was discussed during a tour of Latin America by Chinese Prime Minister Li Keqiang in May last year, the cost was estimated at $10bn, although no feasibility studies had been done.

Mr Vizcarra’s comments follow remarks by Pablo Kuczynski, the newly elected president of Peru, suggesting the line could be too expensive and environmentally harmful to build.

Kuczynski said he had raised his concerns during a recent state visit to China.

"I told them, without getting confrontational, that this trans-Amazonic train has very high costs," he said, according to Reuters. "It could have environmental impacts and we have to look at that carefully."

The cost estimate envisages a link between Porto do Acu on Brazil’s Atlantic coast and Peru’s Puerto Ilo on the Pacific.

The Peruvian minister noted that China’s investment in the rail scheme was still unknown, as the project was in an early stage. Brazil, China and Peru began feasibility studies into the railway in May last year.

The railway, which may be as long as 5,300km, would make it easier for China to penetrate the region’s economies, and avoid the need to send ships round Cape Horn or through the Panama Canal.

It was also suggested during Li’s 2015 tour that China would invest $250bn in South America over the following 10 years.

Image: The Amazon forest near Manaus (Neil Palmer/Creative Commons)

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  1. Failure to use the Amazon River as a medium for heavy transportation causes degradation of the Amazon River Basin’s prized vegetation. China Rail’s “plan” is economically infeasible, obviously! I offered a “Trans-Pacific China-Brazil Trade Route” [Chapter 4, pages 169-192 in WORLD MACRO-IMAGINEERING: AQUATECTURE MEGA-PROJECTS, Inifinity Publishing, 2015] which requires only a short railroad/super-highway traffic connection between the upper tributaries of the Amazon and the coastal seaport at Callao called, in Peru, the San Lorenzo Megaport Project. Its cost can be guesstimated at less than USD$1 billion!

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