【Text by Observers Network, Wang Yi】In recent months, there have been continuous reports that China is planning to build a railway across South America, connecting the Atlantic coast and the Chancay Port in Peru, known as the Two Oceans Railway project. Now, the project has seen new progress. According to a report from Brazilian news agency on July 8, Brazil and China signed a memorandum of understanding on July 7 to prepare for joint feasibility studies on this matter.

The Hong Kong South China Morning Post pointed out on the 9th that once completed, this railway is expected to save about 12 days in freight time compared to the current shipping route through the Panama Canal to Asia.

According to the Brazilian news agency, the memorandum of understanding was signed by Infra S.A., a company under the Brazilian Ministry of Transportation, and the China Railway Economic and Planning Research Institute, an enterprise under the China State Railway Group Co., Ltd. The China Railway Economic and Planning Research Institute will conduct in-depth research on Brazil's multimodal transportation system, which includes railways, roads, waterways, ports, and airports, as well as the country's existing projects.

On July 7 local time, China and Brazil signed a memorandum of understanding for cooperation on the Two Oceans Railway. Brazilian News Agency

The Two Oceans Railway will integrate Brazil's "East-West Integration Railway" (FIOL), "Central-West Integration Railway" (FICO), and "North-South Railway" (FNS). The South China Morning Post stated that according to preliminary plans, this railway will be approximately 4,500 kilometers long, starting from Ileus in Bahia state in eastern Brazil, passing through Rio Branco, the capital of Acre state in the northwest, crossing the Andes Mountains, and reaching Chancay Port.

It is estimated that the cost of this project may exceed 70 billion US dollars, but once completed, it is expected to shorten the time for transporting Brazilian goods to Asia by up to 12 days.

Before signing this memorandum of understanding, China had been negotiating with Brazil, Peru, and other countries on this railway project for several years. Since 2014, China had planned a railway project extending westward from Rio de Janeiro state in southeastern Brazil, across South America, to Callao Port in Peru. However, due to technical, economic, and political factors, this project was put on hold.

With Lula regaining power in Brazil in 2023, the Two Oceans Railway project saw a turning point. The Lula government highly values the process of South American regional integration, considering the project crucial for opening up access to the Pacific, deepening trade and economic relations with Asia, and promoting the export of agricultural products and minerals.

Two Oceans Railway route plan. Brazilian media

At a time when the Trump administration in the United States imposed excessive tariffs and pressured companies not to use Chinese-built ports, the Two Oceans Railway has become even more important. U.S. officials believe that Chinese-built ports, railways, and other transportation methods help them transfer goods to other countries to avoid high U.S. tariffs.

The South China Morning Post analyzed that for China, the Two Oceans Railway is also seen as a key to unleashing the potential of Chancay Port. Chancay Port is located about 80 kilometers north of Lima, the capital of Peru, and officially opened in November last year. After the operation of Chancay Port, the transport time for goods exported from South America to Asian markets is expected to be reduced from 35 days to 25 days, significantly shortening direct flight times and greatly reducing logistics costs. However, if it can be directly connected to Brazil, the regional hub status of Chancay Port can be fully utilized.

In April this year, a Chinese delegation composed of technicians and officials visited Brazil to discuss major infrastructure plans for Brazil and South American integration, especially railway projects.

In May, a delegation from the China National Railway Administration visited Brazil, Peru, and other countries, holding talks with the Brazilian Minister of Transportation, the Peruvian Ministers of Economy and Finance, and the Minister of Transport and Communications. They focused on discussing the Two Oceans Railway project, and both sides conducted technical discussions on railway, road, and waterway networks. On May 9, Brazilian Minister of Planning and Budget Simone Tebet revealed to Brazilian media that China has shown strong interest in helping Brazil build railways.

Peru has also shown a positive attitude. At the end of May, Peru issued a statement saying that they would hold high-level talks with China and Brazil, willing to jointly invest in building the Two Oceans Railway and accelerate the implementation of the project.

However, the advancement of the Two Oceans Railway project also faces some challenges in terms of technology, cost, and environmental protection, such as the need to cross protected areas and indigenous territories.

Nevertheless, both China and Brazil remain optimistic about the project's prospects. China State Railway Group stated in a statement, "This cooperation is the crystallization of wisdom and mutual trust, and will inject new vitality into the development of transportation in both countries."

The Brazilian government also responded, stating that once completed, the project will promote regional integration and sustainable infrastructure development. "Brazil is ready to lead a new era of infrastructure in the logistics field. This leadership will be supported by a sense of responsibility, high-quality engineering, solid partnerships, and a future-oriented railway network," said the government.

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