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Chinese Commit $10 Billion to Build Train from Peru to Brazil
Premier Li Keqiang is making the rounds in Latin America this week, stopping in Brazil, Colombia, Peru, and Chile. The Premier is here to give another push to trade relations, in a region in which China is already investing heavily. He is bringing $50 billion in investments to Brazil, whose roaring economy is not roaring anymore.
BBC Mundo says that $10 billion of those funds will be used to build the 3,500 km Trans Oceanic Railroad. The railroad, which has no formal name yet, will run all the way from the Pacific Ocean to the Atlantic. But there is something wrong with the distance given by the BBC, as a highway along a similar route is only 2,600 km.
Building the Trans Oceanic Railroad is in China's interest, because shippers would be able to ferry soybeans and other goods from Brazil to ports in Peru for export to China and Chinese goods in the other direction. That would bypass the expensive and congested Panama Canal. It would even go around the new Nicaragua Canal also being built by the Chinese, a route which would require a few days steaming north for cargo vessels.
The President of Brazil needs good news like this as a distraction from her troubles.
President Dilma Rousseff's approval rating has fallen into 20s in the wake of corruption scandals at the state-owned Petrobras oil company, where she was chairman; Petrobras executives skimmed off $3 billion USD. (The Financial Times calls this an "Oily Mess.") What was not stolen might have been directed to the president's Workers Party say different reports. Even the wildly popular former President Luiz Inácio Lula da Silva, has been tarnished by the scandal since his government also had oversight of PetroBras. (Plus prosecutors are deciding whether to investigate him for influence peddling in the case of Odebrecht construction company.)
In Rio de Janeiro, special forces military are fighting drug gangs only blocks from the Brazil Summer Olympics 2016 headquarters. And the Olympic Sailing Competition has said it will have to relocate its regatta to cleaner waters due to the pollution in the Guanabara Bay.
But getting the railroad out of the port of Rio is the smallest of problems. The major difficulty lies in the political and geographical landscape in between either end.
Politicians for decades have dreamed of such a transcontinental railroad. Certainly China, with its engineering prowess and experience building railways in difficult places can build this one. But there are and have been detractors for other such projects.
The Los Angeles likened the ultimately successful effort to build a 2,600 kilometer highway linking Peru to Brazil to the film "Fitzcarraldo." That movie is about a mad German's desire to build an opera houses in the upper reaches of the Amazon River. His entire project collapsed into the river and sailed over the falls.
The Wall Street Journal too noted difficulties with that highway project. They pointed out that the Inca Indians, whose mighty empire paved roads all the way from the Colombia to Chile, "could not clear a path into the Brazilian Amazon," adding, "Few of the 16th-century Spanish conquistadors who descended into the jungle from the Peruvian Andes in search of El Dorado survived the trip."
The Brazilian Amazon is difficult terrain. Peru poses other problems.
Peru is divided into two distinct regions: a narrow desert coastline ringed by the very high Andes mountains. The mountains are so high that one can scarcely breath there at 5,000+ meters and the crossings are buried in snow in the Andean winter in June and February.
China has already built the world's highest railway from Qinghai to Tibet, whose highest point is just over 5,000 meters, and is planning to go even higher into Nepal. But that part of the world is a high plateau with tall mountains on top. The Andes Mountains tend to shoot straight up from the valleys. The Chinese train is going to need heavy duty brakes and one wonders where a Swiss-like cogged railway might be in order.
Beyond the mountains, to the east of the Andes is a vast and at times lawless area. This is where coca is planted. Gold miners dig illegal mines there and have contaminated some rivers with mercury. Primitive tribes, such as you would see on the Discovery Channel, live in the jungle areas. You could in fact see these naked Indians on TV recently as a Chilean TV channel last year filmed a reality show there. That was until Peru expelled the TV crew from the country.
In the Andes, indigenous people over the years, and today, have risen up against mining projects and are certain to protest anything passing through their area. In typical Latin American fashion, they take their dispute to streets rather than the courts, throwing rocks at the police and burning ties.
Peru has a growing economy and for the most part is stable. But a poll released this week said that 70% of Peruvians fear that their country will become a "narco state."
Next door, the President of Bolivia is upset that the train will not pass through his country. It would be the shortest route, he says, but the President of Peru has decided to go around any anticipated problems there.
There is reason to not put a lot of faith in cross border infrastructure projects in this area.
Chilean investors spent a great deal of money to built a natural gas pipeline into Chile from Argentina only to have the Argentina cut off the supply abruptly in 2007, citing logistical problems on their side.
Peru is building a natural gas pipeline all the way from Lima to towns near the border with Chile. But there is no discussion of bringing it only 80 km further south where Peru could sell gas to the northern Chilean cities of Arica and Iquique and perhaps go further than that.
Not all of the construction will be so difficult as the vast country of Brazil is for the most part flat and solid ground. That is what makes it so suitable to farming. When China finishes this project, which could take many years, it is certain to lift the economy in the region as it would let freight travel where it cannot currently go. The railroad is yet another in a series of infrastructure investment by China in the region. This is because the country is looking to secure its supply of some of the vast mineral, petroleum, and agriculture wealth of South America.
[Source: By Walker Rowe, China US Focus, Beijing, 26May15]
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