China’s trillion-dollar Belt and Road Initiative is hailed as the “project of the century” as the world’s second-largest economy looks to take the lead role in globalisation historically held by the West.
Much has been discussed about the political, economic and cultural impact that the initiative could have globally since it was introduced in 2013. However, there has been little attention paid to the infrastructure projects in the making.
FinanceAsia will publish a series about the 10 biggest Belt and Road infrastructure deals that have been signed in the 2018 calendar year, and examines which companies are spearheading and likely benefitting from these projects.
The series follows a similar feature in 2017 where we examined BRI projects that started that year. Click here to revisit the feature.
These projects will be published in descending order based on their estimated project value. We will only include infrastructure deals of more than $1 billion.
10. San Martín Rail Rehabilitation Project, Argentina
Companies involved: China Railway Construction Corporation (CRCC)
Status: Contracts signed in December 2018
Estimated project value: $1.1 billion
China’s commitment to modernise one of Argentina’s main rail links is a sign that the country is taking its Belt and Road infrastructure ambitions into South America.
The $1.1 billion contract to rehabilitate part of Argentina’s San Martín rail network was signed when leaders from the world’s leading countries, including Chinese president Xi Jinping, met at the G20 Summit at Buenos Aires in December last year.
China Railway Construction Corporation (CRCC), the country’s second largest construction company, will be the main contractor for the renovation and reconstruction of the 1,020-kilometer rail link that connects Rosario in the east and Mendoza in the west.
The San Martín rail rehabilitation project is part of Argentina’s masterplan to upgrade its national railway network in order to better connect its inland factories with sea ports, including Puerto de Buenos Aires, or the port of Buenos Aires that is adjacent to Rosario.
It will also greatly enhance the railroad’s efficiency by improving maximum train speed and allowing longer trains to serve the route.
CRCC said trains serving the San Martín route can travel at a maximum speed of 90 kilometers per hour, three times the current speed of 30 km/hr. The rail link’s freight volume is expected to more than quadruple from 3 million tons to 13 million tons per year when the project completes in 2024.
Argentina’s transport ministry expects the rehabilitation project to reduce transport cost along the San Martín route by 55%, or about $200 million every year.
“The works will impact the provinces of Mendoza, Cordoba, San Juan, San Luis, Santa Fe and Buenos Aires, reactivating the regional economies, boosting employment and development and reducing logistics costs,” Argentina’s Minister of Transport, Guillermo Dietrich, said. “This is a big step for the reactivation of country’s rail freight transport system.”