Brazil confirms interest in Chinese-funded Amazonian railway

BRASILIA - The Brazilian government has confirmed its interest in a Chinese-funded railway stretching through the Amazon rainforest and linking the Atlantic and the Pacific oceans, an official for state planning has told Xinhua in a recent interview.

Jorge Arbache, secretary for international affairs at Brazil's Ministry of Planning, said a first study was carried out by Chinese firm China Railway Engineering Corporation (CREC), evaluating the possibility of a route through the Brazilian state of Acre which ends at northern Peru's Pacific coast.

However, as this study left doubts about the route's financial viability, other alternatives remain possible.

"The Chinese prepared a study, which was presented to the Brazilian government in 2016 and 2017. This study was examined by a commission led by the Ministry of Transport, with the participation of various railway entities. The commission suggested that new alternative routes be found," Arbache.

An alternative route, also proposed by the CREC, seems difficult to construct as it will have to cross the Andes mountain range as well as a natural reserve area. Besides, it remains unclear whether the project, an investment estimated at tens of billions of dollars, will be profitable.

"There is information on the table about a route that would go through Bolivia, slightly lower, and would exit in Peru to the port of Ilo. This route, as far as we know, is being examined, but we do not know the situation of this study," Arbache said.

While solutions needed to be found, the official reiterated the Brazilian government's "strong support for the project," since it sees its economic ties with China as "of extreme importance."

"China is our largest trading partner and has become our greatest partner for investments. For the Brazilian government, this is very important ... as we are stimulating the strengthening of ties in various ways, not only in economy, trade, finances and investments, but also in culture and academia," he said.

Arbache highlighted in particular the China-Brazil Fund for the Expansion of Productive Capacity set up in 2017 that will fund joint projects between the two countries.

According to Brazilian data, Chinese investments in Brazil totalled $6.7 billion in the second half of 2017, setting the second-highest annual record for Chinese investments in the country.

Chinese investments have been made in sectors such as energy, transportation, agriculture, financial services, the chemical industry, as well as electricity generation and transmission.

Arbache said China had expressed strong interest in Brazil's ongoing privatization programs. The Brazilian government, he said, is expecting the participation of Chinese firms in the privatization of Brazil's largest power company Eletrobras later this year.