Ecuador advances toward concessioning railway works

Ecuador’s transportation and public works ministry has started the process of formally taking charge of the country’s 966km railway system, a first step to contract rehabilitation to the private sector.

The US$2.5bn rehabilitation plans include concessions and PPPs.

Transport and public works minister Marcelo Cabrera told reporters the transfer will conclude this year, after which the ministry will start the structuring phase.

According to Cabrera, rehabilitation should focus on both passenger and cargo transport, including tourism.

Railway operations stopped in March 2020 and two months later the liquidation of the public railway company was decided, which recorded losses of US$144mn between 2012 and September 2020.

The company's liquidator, Paulina Escobar, told reporters that the financial problems were related to tourism as only income source, which did not generate enough resources to cover maintenance and wages.

According to the government, the rehabilitation should favor the change in the energy matrix, opening the possibility of using electric trains, which would help decarbonize the transport system.

Several foreign companies have expressed interest in the rehabilitation, which will include design, construction, operation and maintenance, financing, and others.