China-led rail project in South America may be back on, Peruvian president says
- Beijing presented a plan to link Brazil’s Atlantic coast with Peru’s Pacific coast several years ago but the idea was shelved over cost concerns
- But Martin Vizcarra says China might be the perfect fit for a three-way partnership
Peruvian President Martin Vizcarra said on Friday that China could partner with Bolivia and Peru on a massive intercontinental railway project that Lima once dismissed as too costly when pitched by Beijing more than two years ago.
In an interview on the presidential plane, Vizcarra said China might still be a natural fit as a partner to help finance and build the project, because it would likely buy the goods the railway would deliver to a port on Peru’s southern Pacific coast.
“Between the two of us [Peru and Bolivia] we need a third partner to help turn it into reality,” he said.
Asked if China could be that partner, he said: “Yes, of course, because we need a partner that benefits from the project … Is it the only one? No.”
China first proposed a railway to link Brazil’s Atlantic coast with Peru’s Pacific coast several years ago to help it reduce costs of importing commodities from resource-rich South America.
But in 2016 Peru balked at the US$60 billion price tag China estimated to build it, including US$35 billion for the Peru leg. Since then, landlocked Bolivia has taken the lead on reviving talks on alternate routes that would pass through its territory, which would help reduce its reliance on historic foe Chile to ship its exports.
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In December, Peru’s government put the cost of the Peruvian portion of the revised project at about US$7.5 billion.
“We’re going to take another look, because since then studies have continued, so we’ll have more elements to make decisions,” Vizcarra said, adding that he planned to discuss the project with Bolivian President Evo Morales later this month.
Vizcarra, who was previously vice-president and transport minister, took office a year ago when his predecessor resigned in a corruption scandal. Since then, he has governed as an investor-friendly pragmatist amid increasingly heated rivalry between China and the United States.
Vizcarra said Peru would continue to be a strong partner of both countries.
“There’s a hegemonic competition at a global level. We see it. We understand it. We respect it. But we’re not going to take sides,” he said. “They’re countries we work with to generate investments and development projects for our country.”
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China overtook the United States as Peru’s largest trade partner years ago, thanks largely to its imports of minerals from the South American country, the world’s No 2 copper producer.
Peruvian copper production has been partly impacted by community resistance to large projects. Vizcarra said there was not yet enough support from surrounding communities for Southern Copper Corp’s long-delayed US$1.4 billion Tia Maria project to start construction.
The copper mine project was derailed by deadly protests in 2011 and again in 2015, and could face at least another year of delays if the government does not issue a construction licence for it before its approval for an environmental permit expires in August.
