China Inks US$12 Billion Argentine Rail Projects Deal

China has agreed to refurbish and develop at least US$12 billion of rail projects in Argentina, South America’s second-largest economy. The agreements include a US$10 billion refurbishment of the Belgrano Cargas, a freight network, and a US$1.85 billion upgrade of the Ferrocarril Belgrano Norte y Sur railroad.

The Argentine embassy in China revealed the agreements during President Cristina Fernandez de Kirchner’s visit to China, where she is heading a trade delegation. Argentina was China’s largest supplier of soybean oil until shipments were disrupted earlier this year in a trade dispute.

China National Machinery & Equipment Import & Export Corp. will work on the Belgrano Cargas project, while a group of Chinese companies, including Shaanxi Coal Group Investment Co., will lead the Ferrocarril Belgrano project. Belgrano Cargas is a freight network that connects the city of Buenos Aires to 13 of Argentina’s 23 provinces, including the main soybean producing areas, and to Chile. Soybean is the main commodity shipped from Argentina to China.

As of 2006, Belgrano Cargas had 150 locomotives, 39 of which were operating. The railway has 7,347 kilometers (4,566 miles) of tracks, of which 5,069 were in use in 2006. The Belgrano Norte y Sur systems transport passengers in the Buenos Aires metropolitan area.

China Northern Locomotive & Rolling Stock Industry (Group) Corp. will also supply 220 carriages and 20 trains at a cost of US$330 million. China Citic Bank Corp. and China Development Bank Corp. will lend Argentina’s Ministry of Economy and Public Finance US$273 million to help fund the purchase, according to a separate statement from China Citic. A division of China Railway Group Ltd. also agreed tentatively on a US$1.8 billion that would involve constructing a subway in Cordoba as well as a US$1.5 billion project to extend a train line to Buenos Aires’ Ezeiza Airport.

http://www.breakbulk.com/railtrucking/china-inks-us12-billion-argentine-rail-projects-deal