South American Transcontinental Railway Road

South American Transcontinental Railway Road

A major South American infrastructure deal is in the works as China’s prime minister tours the region this week. Beijing is hoping to back and build an ambitious interoceanic railway between Brazil and Peru that could make for faster, cheaper transportation of local commodities to resource-thirsty Chinese markets. The proposed rail link, known as the Twin Ocean Railroad, would connect Porto do Açu, a Brazilian Atlantic port, with Peru’s Puerto Ilo on the Pacific Ocean through some 3,300 miles (5,300 km) of rail. The railway is expected to cut transportation time and reduce the cost of shipping grain from Brazil to China by about $30 a ton.

The rail line is estimated to cost $10 billion and reach completion in six years; around 2,000 miles of it will run through Brazil. There are high financial hopes for the deal. China, currently facing an economic slowdown, would be able to access raw materials more efficiently and at a lower cost if the railway is successfully completed. It could also be a major boost to Latin America’s sluggish economies. High-speed rail could help get products to the Pacific, which is a growing destination for Latin American exports, but it could also facilitate trade among Latin American countries themselves.