Argentina: US$35 million loan signed with Argentina for Buenos Aires-Mendoza railway

Enrique García, President & CEO of the Andean Development Corporation (CAF), Roberto Lavagna, Minister of Economy and Production, and Julio Miguel De Vido, Minister of Federal Planning of Argentina, signed in Buenos Aires a loan agreement for US$35 million to support the rehabilitation of a major section of the Buenos Aires-Mendoza railway, interrupted since 2001 due to the floods of Laguna La Picasa. The bi-oceanic transport corridor to be rehabilitated forms part of the MERCOSUR-Chile hub of the South American Regional Integration Infrastructure (IIRSA) led by CAF and other multilateral financial institutions in the region.

With this loan, CAF is financing the execution of the La Picasa Railway Viaduct Project and supporting a program to strengthen the Argentine rail sector at a total cost of US$51 million, including three investment studies for new rail projects which are part of the government strategic plan for the sector. The executing agency is the Federal Planning Ministry through the Transport Secretariat.

Enrique García said that the project, set to conclude in 2007, would have a positive impact on Argentinean competitiveness, evidenced by an expected significant 20-hour reduction in the travel time on one of the country’s economically most important rail trunk routes. The project will also cut operating costs and charges which is projected to result in a 15% annual increase in the volume of cargo transported.

The shorter travel times with the consequent improvement in the quality and safety of the transport service will make possible the reestablishment of a passenger line between Retiro and Mendoza. From the environmental point of view, the project will conserve the fish fauna, the balance of surface drainage and the vegetation cover.