Brazil gives up on train line project suggested by China

5 February 2018

Brazil has given up on the idea of building a railway to transport goods to China through Peru because the project would have been “too expensive” and would face “absurd” engineering challenges, said Jorge Arbache, secretary of International Affairs at the Ministry of Planning, Development, and Management.

The 5000-kilometre line, which would have needed to traverse the Andes to reach the Pacific Ocean, was announced during the visit of President Xi Jinping to Brazil in 2014 and was intended to speed up the process of exporting raw materials, such as soybeans and iron ore, to China, at a lower cost, avoiding the Panama Canal.

But considering the estimated cost of US$80 billion, Arbache told the Reuters news agency that the railway would have had to carry higher value-added goods and not just commodities in order to be economically viable.

Arbache also said that Peru objected to the route, as it passed through one of the country’s most important nature reserves.

The Peruvian government also argued that the railway could be economically viable if it crossed Bolivia, as it would reduce the cost of construction, have a lower environmental impact and allow the country to have direct access to the sea.

China is Brazil’s largest trading partner, and in 2017 Chinese companies invested US$20.9 billion in Brazil in energy, transportation logistics, agribusiness, financial services, chemicals and pharmaceuticals, and production and transmission of electricity. (macauhub)