Trains in Peru: These are the projects that are attracting the attention of six countries | Trains | Marcona | Aika | TCM | Raul Perez Reyes | economy

Railways in Peru.  Source: MTC

Railways in Peru. Source: MTC

The details of these projects will be ready on the 15th of this month, Transport and Communications Minister Raul Perez Reyes said. This opens the way for both to implement the technology file.

He Lima – Ica Railway It focuses on passengers (passenger train). It will extend 280 kilometers and will invest an estimated USD 7.2 billion, with one-third of the amount financed.

He Marcona – Antahuilas Railway It focuses on mining with prospects for future iron ore projects. “They are USD 9,411 million; Targeting the mining load. “For co-financing, it will be 24% or 25%.” He explained.

In both cases, the Minister is confident that in a favorable scenario, the co-financing from the public side will be less than indicated (the current calculations were made in conservative scenarios).

About him Lima – Barranca TrainExpansion of the profile is expected to begin and be completed by 2025. The estimated investment for the railway is USD 4.2 billion.

“We have already hired a consultancy firm, which is studying (the profile). It should be completed in the second half of next year, which is July, to go for its approval in the third quarter of 2025. From there, we can prepare the technical file. The files will take a year and a half to two years. “During that period, we have to do all the steps to release the assets.” stood out.

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Other Railways

In addition to the three mentioned, with the horizon of upcoming milestones, there are three more projects at the conceptual level (which are now being developed): Lambayek – Cajamarca Railway; Trujillo – Barranca Railway; and Hydroelectric Railway – Quilabamba.

1) Barranca – Trujillo Railway: Although it is for passengers, The main feature of this scheme is agricultural export loadsaid the minister. “If you look at Sanke Port, part of its demand is explained by agricultural export cargo from the north. The idea is that instead of arriving by road, the train is used. “It is a project that has a conservative scenario of 25% co-financing, but it would be better in a scenario with (irrigation project) Chavimochic III” explained. The estimated investment for the project is US$4.8 billion.

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2) Lambayeque – Cajamarca Railway: The project focuses on mining activity, particularly in the development of mining projects such as El Galeno, Michiganville and Conga (Cajamarca), as well as Canariaco (Lambayec). Your “friend” will be Eaton Harbor.

“What we need to do is put together a project similar to the one we’re working on, which allows us to remove this mining cargo and transport it to the port of Eaton. “It’s a prepared area, there are plans for this port (…) but, the co-financing level (of this railway project) High: With an investment of nearly 4.8 billion USD, it reaches 65%. ,” He described.

The high percentage of co-financing is explained because Perez Reyes said “Cajamarca has mining projects that don’t have a window, so the region’s mining needs will end in 30 years”. While this is the baseline scenario we’ve worked with, they believe there will be changes that allow the railway project to turn around in that timeframe.

Another factor favoring interest in this railway is the demand for traffic that may come through the Amazon waterway via the Urimaguas. Here the situation was complicated because, as recalled, the waterway was put on hold.

3) Hydro Electric Railway – Quilabamba: The area of ​​Quilabamba in La Convencion is rich – Pérez Reyes admitted – because it has gas reserves, supplies of goods such as fruit. Goods from this part of the country pass through the Malaga highway. To change this, two options are proposed. Firstly, nearly 14 kilometers of tunnel will be built to focus on commuters; Freight needs will be met by the hydroelectric – Quilapamba railway. The estimated investment amount is US$550 million.

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“The idea is to connect Quilapamba with Intihuatana so that the traffic load can be moved through this train. “We’re talking, we might order it this year.” pointed out.

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Government to Government

These projects will be undertaken under Government to Government (G2G) programme.. Precisely, this collection was shown during the Minister’s recent visit to China (as part of the delegation of the President of Peru, Tina Bolavarte).

“There were signs of interest from the (Chinese) government. Not just considering the visit of (President) Xi Jinping, what we need to do at the end of the year is turn these signs of interest into concrete actions.” He pointed out.

But China is not the only one interested. Minister Perez Reyes explained that there are signs of interest from other economies such as Canada, Germany, France, Austria and the United Kingdom.

These projects do not require external debt and their commitment levels range from US$ 7 billion to US$ 13 billion over 40 years, as a contingent liability. (depending on whether it is favorable or conservative scenario respectively). Many of these projects have been presented in the past and read at the time it was a very high contingent liability. Peru has a low debt level, and I’m not proud of that. Are we delaying the development of the country to meet a statistic? But, again, it’s not debt, it’s contingent liabilities. He insisted.

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The projects, together, create a package of US$31 billion. How is it going to be financed? The race must go one back Project Funding.

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To base the concept, project finance is Structured financing based on long-term cash flows Created by a company established for an isolated project, taking the assets of this company as collateral defines BBVA.

The real differentiating element is that it is built on long-term predictability of its cash flows based on a framework of fixed contracts with its customers, suppliers, market regulators, etc.

“The state will not go into debt. It is not public debt, it is a contingent liability associated with annual payment obligations. 31 billion US dollars will not be foreign debt, but from projects Perez Reyes added.

Central Railway

At another time, the MTC minister said “Restart Central Railway” Although not in the short-term plans, it has the potential to expand beyond Cerro de Pasco, toward Huanuco and even the Amazonian cities.

“But we will be very cautious here. “We want to wait for the demand for the new central highway and the highway in its Oyón – Ambo and Canta Huallay sections,” Done.

Biocyanic train. As already stated ManagementMinister Perez Reyes indicated that he is not interested in promoting the project for now. He also said that during the trip to China, the country’s companies did not even discuss this infrastructure.

About the author

Whitney Minan

Kestian is the newspaper’s economics editor and ESG coordinator. Degree in Communication Science. With almost 10 years of professional experience in the field.

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