Sparks

The first clean mega-infrastructure project

 By Chris Dalby

In late March, an unlikely coalition of countries met to discuss an equally unlikely project. The Central Bi-Oceanic Railway Corridor (CBRC) is an idea that has been mulled over for a long time. Seeking to link the port of Santos on Brazil’s Atlantic coast to the port of Ilo on Peru’s Pacific coast, it could potentially revolutionize the flow of goods and people across the continent…

The scope of this project is ambitious but its room for error verges on the catastrophic. Two possible routes are being discussed, but the final project will definitely cross the Andes mountains, is likely to snake its way through the Amazon rainforest, and will increase trade into both oceans. Germany, Brazil, Peru, Switzerland, Chile, Bolivia, Uruguay and Paraguay are all set to bring their ideas for Latin America’s most ambitious infrastructure project—a railway line cutting across the Amazon, the Andes and countless other natural barriers to join Brazil’s Atlantic coast and Peru’s Pacific shores.

Not only will this project cost billions but the countries also have a real challenge ahead of them—to make this Trans-Oceanic Railway as clean as possible. Bulldozers smashing down ancient trees and gas-guzzling locomotives are not the aim of the game here. “This project is iconic and is likely to become center-stage for Latin American civil society organizations,” said Paulina Garzon, director of the China-Latin America Sustainable Investment Initiative.

China has been a regular supplier of electric-powered trains to South America and will be expected to do the same. Potential Swiss financiers will have stringent sustainability requirements. German engineers will have to grapple with saving some of the world’s most pristine environments with budgetary constraints. China has been a main crux of the argument. After all, while its expertise for mega-infrastructure projects is undoubted, its own environmental track record leaves much to be desired. Since the beginning of its involvement, China has been keen to settle any doubts. Upon visiting Peru in 2015, Chinese Premier Li Keqiang said: “(We) agree that the joint feasibility study for this project, will not only be favorable to its development, but will also protect the environment.” Then Peruvian President Ollanta Humala added that “China respects Latin America’s biodiversity…to carry out infrastructure, it is necessary to protect the ecological surroundings.”

Given that a study by Boston University found that “the high concentration of Chinese activity in Latin America’s agriculture and extractive sectors has placed a heavy strain on water supplies, and increased deforestation and greenhouse gas emissions (GHGs)”, it is natural to be cautious about such statements. Greenpeace issued its own warning.”To make a channel to the Pacific opens the Amazon to the Chinese market. It is an illusion to believe this will have no impact,” said Greenpeace’s Amazon campaign director, Paulo Adario.

A railway line cutting across the Amazon, the Andes and countless other natural barriers to join Brazil's Atlantic coast and Peru's Pacific shores

Latin America is also not the region it once was. After years of unbalanced trading relationships due to an over-reliance on raw material exports, countries are demanding changes to their relationships with China. The allure of seemingly bottomless Chinese funding for a project such as the CBRC is not enough. Environmental and budgetary concerns led Peru’s new president, Pedro Pablo Kuczynski to freeze China’s participation for the time being. “This is an idea that was promoted last year to transport soy from Mato Grosso (in Western Brazil) to China more quickly, but I have certain questions about this train,” said Kuczynski.

This doubt from Peru has seen Bolivia step into the breach. The original outline for the railway would have seen it skirt Bolivia to cross the Brazilian Amazon straight into Peru. It has launched a number of feasibility studies to study its environmental impact, its economic impact and ideal route. Kuczynski himself has since backed the idea of the route including Bolivia, likely to spread out the benefits and costs. Heavyweight allies have signed up, as shown by the March summit. Germany’s State Secretary of Transport, Building and Urban Development, Rainer Bomba, described the train as “the project of the century.” Forty German companies, along with Swiss counterparts, took part in the meeting, including heavyweight Siemens.

The Brazil-Bolivia-Peru route now seems to be the winner. Brazil is expected to sign a memorandum of understanding in May to officially come on board. However, the expansion of the project has brought up new environmental concerns. For if landlocked Bolivia should benefit from this mammoth railway, why not the likes of Paraguay and Uruguay? Paraguay is not on the main line of the railway but wants to be connected to this transport behemoth through waterways, which will also have to be kept unpolluted. Uruguay, even further away, would seek to participate in increased river traffic, as would Argentina. The Paraguay and Parana rivers are crucial to economic activity and development in the region, used for shipping, fishing, irrigation, natural preservation and with inland ports being planned along them. However, they have a troubled history of their own. Their official inclusion to the project will broaden the scope for environmental risks.

So far, this train is still seeking to gather steam. Two potential routes have been whittled down to one. Priority partners have shifted from China to Germany and Switzerland. More and more countries are signing on. It will not be an easy task, and observers will be watching hawkishly every step of the way. Sooner rather than later, the participating governments and companies will have to provide environmental specifics and go into exhaustive detail. “It is way too big to pass unnoticed, and … will be tremendously controversial on both environmental and social fronts: first because of its size and location but also because Latin-American environmental groups and indigenous organizations are quite vocal and very well-networked,” added Garzon.

This train seems almost bound to happen. Admittedly, it would benefit Brazil and Peru most of all, but it would also allow smaller Latin American countries to integrate markets and supply chains that largely avoid them today.

SEE MORE: America’s aging energy infrastructure by Chris Dalby

about the author
Chris Dalby
Journalist. Editor. China, Mexico, Latin America, Asia, place branding, Olympics, oil and gas, mining, renewable energy, international politics.