New railway to link Argentina and Chile

Argentine President Cristina Fernandez has announced that two Argentine companies will invest around US$ 3 billion to build a rail network connecting Argentina and Chile.

Local news reports said Argentina's Corporacion America and Tecnicagua will build and pay for the project. It was not immediately clear if the government would also contribute to the cost of the railway.

"This project will allow for the multiplication of trade between Argentina and Chile through the construction of a 23-50 km-long tunnel connecting Buenos Aires with Valparaiso," Corporacion America said in a statement.

The tunnel will be built in part of Mendoza Province that currently accounts for 70% of bi-national trade. The work also includes extending the existing rail networks in both countries.

Capacity for trade through this area will rise to 50 million tonnes annually, up from 5 million tonnes now, the company said.

"The project will connect markets in the Asia-Pacific, Chile, Mercosur and the Atlantic. Its construction will create benefits for the entire region, and increase transportation, tourism and integration," the statement said.

Construction is expected to take six to seven years, with two years for bidding and technical studies before construction begins.