Shaw Group in talks with US railroad cos for Feristsa project

Friday, December 9, 2005

US infrastructure firm Shaw Group (NYSE: SGR) is in talks with a number of large US rail corporations to run and operate Feristsa, a proposed US$3bn rail project linking Central America, Shaw official Jay Dick told BNamericas.

"At this time, Shaw is in final negotiations with a number of large US railroad industry corporations. The contracts have not been signed yet, so I can't give their names, but let's say they are Fortune 500 companies. They will eventually run and operate Feristsa," said Dick, who is the group's senior program manager for Latin America.

The project's engineering feasibility studies will be ready in two years, with the third year to arrange the project's financing, the bank syndication and the equity investment. The actual construction of Feristsa would take another four years, he said.

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The 2,500km-long line would be used to transport containers arriving at El Salvador's Acajutla port, Guatemala's Puerto Quetzal and Costa Rica's Puerto Cabreras, among others, straight to Mexico and the US, Dick said. This would offer an alternate solution to increasing container traffic congestion at western US and Mexican ports.

Shaw is currently in talks with the Central American Bank for Economic Integration (Cabei) and Plan Puebla Panamá (PPP) for the project's funding and feasibility studies, Dick added.

Feristsa would transport predominantly intermodal freight and would be a privately owned commercial railroad going from the Panama Canal through the entire length of Central America, connecting with the Mexican commercial railroad system at the Guatemala-Mexico border.

The Shaw Group is an engineering, construction, fabrication, environmental and industrial services organization with over 19,000 employees worldwide.