For the development of the first electric train, Congress is analyzing a new government loan with the Central American Bank for Integration
and Development, CABEI, for $550 million. - Casa Presidencial courtesy photo -






















Published Tuesday, September 8, 2020


Government signs an agreement to
speed up the $500 million electric
train project



  
By the A.M. Costa Rica staff

This Monday, the government through the Institute of Railways signed an agreement with Inter-American Development Bank, IADB, for the development of technical analysis of the electric train project.

For the development of the first electric train, Congress is analyzing a new government loan with the Central American Bank for Integration and Development, CABEI, for $550 million.

According to data provided by the government, the loan with CABEI is for a term of 25 years and has no commitment fee, which means that the government will not incur costs for having the money saved and unused during the process of hiring a company in charge of the train.

The government has a plan to obtain a counterpart for $1 billion in foreign investment since this is a concession project.

A “concession” or “concession agreement” is a grant of rights, land or property by a government to a corporation or individual to develop a project.

This agreement signed with IADB is non-reimbursable, to carry out an analysis of the train's plan, the institute said in its statement.

According to the First Lady Claudia Dobles, who is the promoter of the electric train project, this agreement with the IADB will allow an independent technical review to lower costs and reduce the investment of the project.

“The technical team of the IADB made up of 10 experts, among them railway specialists, in infrastructure, finance, economic evaluation, legal management and environmental management, with experience in railway projects in cities such as Bogotá, Quito, Lima and Panama, and many of them with experience in mass public transportation of people in almost all Latin American countries," Dobles said.

The institute expects to receive the document with the bank's recommendations in October. This document will be included in the project that will be submitted to a public tender to contract the company in charge of developing the electric train.

The institute has planned that the train will travel through 84 kilometers of the Greater Metropolitan Area, which includes the San José surrounding cities of Alajuela, Heredia and Cartago.








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Is it a good strategy for the government to take on a loan to develop an electric train during the economic crisis caused by the pandemic? 
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