Govt signs US$7.5bn contract to build Tinaco-Anaco rail stretch, install factories

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Friday, July 31, 2009

Venezuela and China have signed a US$7.5bn contract to start construction on the Tinaco-Anaco railway stretch, government news agency ABN reported.

The agreement was signed by Venezuela's state controlled rail company Instituto de Ferrocarriles del Estado (IFE) and Chinese consortium China Railway Engineering Corporation (Crec).

Crec will provide the technological know-how and train local personnel in rail maintenance. Technology transfer will be carried out under a mixed company contract in which Venezuela has a 60% share and China 40%.

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The initiative is part of the national railway development plan which is scheduled to be complete in 2030. The Tinaco-Anaco stretch should be ready by end-2012, according to the Venezuelan presidential website.

The 468km stretch will connect the states of Cojedes, Guárico, Aragua and Anzoátegui, and will have 10 stations. The rail project also contemplates future connections with the Norte Llanero Occidental, the La Encrucijada-San Fernando de Apure, the Centro Conexión Colombia, the Capital and the Centro Oriental rail lines.

The Tinaco-Anaco line will transport 5.8mn passengers and some 9.8Mt of cargo a year at speeds of over 220km/h.

Ferrolasa - a company established by Cuba and Venezuela in 2006 to boost rail development and technology exchange- will be in charge of providing technical assistance, basic engineering and project engineering.

NEW FACTORIES

As part of an agreement signed between the two countries, several factories specializing in rail materials will be installed in Venezuela, ABN reported.

Once the factories are installed, Venezuela will be in charge of operations, said public works and housing (Mopvi) minister Diosdado Cabello.

"This was established in the contract's framework and the transfer of technology will be carried out under a mixed company model," Cabello said.

Firms will be created to manufacture rail cars, railroad ties and railroad switches, among others.

Currently any South American country that wants to build a railway has to go to European or Asian countries because they supply these materials, said Cabello, adding that soon Venezuela will have its own factories using national steel and Chinese technology.

Under the same agreement, 100 Venezuelans will travel to China to learn about railway technology through Crec.