FCA wins Tren Macho rehabilitation contract - Peru

Published: Wednesday, April 12, 2006 16:07 (GMT -0400)More news from Peru

By Eva Medalla / Business News Americas

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Peru's transport and communications ministry (MTC) has awarded rehabilitation works to be done on the country's Tren Macho railway to Ferrocarril Central Andino (FCA), the ministry announced in a statement.

FCA's technical proposal was approved by the MTC, while its economic proposal is being reviewed for approval by Peru's ministry of finance and economy (MEF).

The company presented a project worth US$18.1mn for the rehabilitation of the Huancayo-Huancavelica railroad, of which US$14.9mn are to be loaned by the Andean Development Corporation (CAF).

The works will include replacing the railroad's current narrow gauge track of 0.92m for a standard size one of 1.43m. The initiative will be fully financed by the state, and is to be completed in 480 days, joining with the railway that connects Huancayo to capital Lima.

The rehabilitation is the first phase of the railway upgrade. A tender for the provision of railway transport equipment is being coordinated, and a tender is expected to be called by next week, an MTC source told BNamericas.

TRASANDINO TUNNEL

FCA is planning to present a project to Peru's next government administration to build a Trasandino tunnel. The company has worked on the project design and in carrying out a number of studies during the past year and expects the initiative estimated at US$400mn to be fully financed by the state, a source from FCA told BNamericas.

The company will not discuss the project in detail until the new government takes office to "avoid wasting any time," the source said. MTC has not received any information whatsoever regarding the project, a ministry official told BNamericas.

The 21km tunnel will shorten travel time to four hours for the Lima-Huancayo route, three hours for Lima-Cerro de Pasco and two hours for Lima-La Oroya.

"We expect with this project that FCA could accelerate travel from 11km/h to 100km/h," news agency Andina quoted FCA president Juan de Dios Olaechea as saying.

The 128km Huancayo-Huancavelica railroad will serve 124 communities and benefit over 175,000 inhabitants. FCA was the only bidder in the international tender process.

TRAIN UPGRADES

On another note, German development bank DEG will begin disbursing a US$12.5mn loan for FCA to convert its train fleet to natural gas, Olaechea said.

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