Argentina signs US$2.5bn China loan to revamp railway service

Argentina has signed a US$2.47bn financing deal with China Machinery Engineering Corporation (CMEC) to revamp Belgrano Cargas railway equipment and infrastructure.

"We´ll add new locomotives and new train cars, we´ll repair almost 50% of the ones we already have, we'll buy new rails, and will renew tracks," interior minister Florencio Randazzo said in a statement.

The deal was signed following a rare meeting between President Cristina Fernández and CMEC head Zhang Chun. Fernández has reduced her activities following surgery to remove bleeding between her brain and skull two months ago.

"This is a comeback of cargo railway service as a key tool to lower logistic costs," he added.

Argentina has recently created state company Belgrano Cargas y Logística SA (BCYLSA), operator of cargo railway services Belgrano, San Martín and Urquiza, following the nationalization of several train lines.

The 9,282km railway network connects 17 out of 23-provinces and Buenos Aires port, and transports grains, sugar, cement, coal, metals, wood, wine and water.

After a series of deadly accidents, argentines have blamed the government for the lack of investment in the railway system and the poor service that several of the private companies in charge of the concessions provide.

In 2013, the government took control of several cargo and passenger railway services and has been trying to reestablish safe commuting conditions along the city's suburban train lines focusing on renewing the fleet, and revamping signaling equipment and procedures.