Large investment approved for development of rail infrastructure in Venezuela

In line with its objective of supporting physical infrastructure projects in its shareholder countries, the Andean Development Corporation (CAF) today approved, at its CXV Board Meeting, financing for Venezuela for $100 million at ten years with two years´ grace. The operation will provide partial finance the building of the Caracas-Tuy Medio. The executing agency is the State Railroads Autonomous Institute (IAFE).

CAF Executive President Enrique García said that this operation was within the priorities set by the organization for Venezuela since it contributed to infrastructure development designed to improve the conditions of mass passenger and cargo transport in the most populated states with the most developed economies.

The Board Meeting approved total operations for $788 million; in addition to the funds for Venezuela, financing was also approved for Bolivia ($75 million), Ecuador ($260 million) and Peru ($353 million).

The Caracas-Tuy Medio project is part of the Venezuelan government´s investment plan to build a rail system of 4,000 kilometers to link the main ports and cities and the country´s key transport corridors. The project forms part of the central railroad system, which includes construction of the Caracas-Valles del Tuy, and Charallave Norte-El Palito lines which meet up with the western railroad system.

Sections I and II of the Caracas-Tuy Medio railroad are the first stage of the Central Rail System, which will link the Caracas Metropolitan Area with a wide area that has public services and is suitable for further development. Its execution will facilitate the transport of cargo and passengers from localities in these valleys to the Venezuelan capital and eventually to the region from Puerto Cabello to the center of the country.

The project aims to diversify and increase the use and capacity of the transport system between all the regions; guarantee the transport of cargo and passengers; provide incentives for the development of inter-modal systems through the complementation and expansion of other types of transport such as road, coastal and river traffic.

The objectives of the project include facilitating the export of non-traditional products, especially mining; stabilizing transport costs and reducing dependence on road transport; and strengthening trade with the rest of the Andean Community and Mercosur, through bi-national connections with Colombia and Brazil.

The aim of the National Railroad Plan is to build a 1,000-kilometer network over 20 years, formed by systems that respond to the country´s economic, political and social activities, and which is given priority in the 1999 Constitution.

The CAF has participated indirectly in the partial financing of the Caracas-Tuy Medio project, through the allocation of $60 million from multi-sectoral loans granted to Venezuela in December 2001. In this context, the operation approved today is considered to be a fundamental contribution to guaranteeing the continuity of the works which are scheduled for completion at the end of 2005, with start up of the system in 2006.

Once operations begin, the railroad will move about 80,000 passengers a day - 28.5 million a year - a figure that should reach 39 million passengers by 2040. The system is expected to generate direct and indirect benefits in the short- and long-term including a significant shortening of the travel times and costs between Caracas and Los Valles del Tuy. It will also facilitate use of the Caracas-Charallave Expressway for light vehicles by offering the train as a faster and safer option for users of public transport.