Trenes Argentinos Infraestructura, an entity of the Ministry of Transport, has announced that the tender for the North Patagonia rail project (Tren Norpatagónico) will be launched in the first quarter of 2019.

The project involves the upgrading and renovation of 700km of railway between Bahía Blanca, a major port city, and Añelo, in the province of Neuquén, through a public-private partnership (PPP). The estimated total investment is US$780 million.

The aim of the project is to improve access to Vaca Muerta, a 7.5 million acre shale field. Current rail access routes have not received significant investments for more than 40 years, resulting in significant deterioration of infrastructure.

The planned constructed works have an estimated term of four years. They include the implementation of continuous welded rail (CWR) technology,level crossings, automatic barriers and enclosures, which will allow trains to operate at twice the current speed, reaching 70 kilometers per hour, and reduce waiting times at intersections by 50%.

The project was first announced in July this year and scheduled to be tendered before year-end.

Alongside the preparation of the PPP tender, the Argentinian government has begun tendering the capacity of the railway to companies operating in Vaca Muerta. Last week, a tender was launched for the transportation of 4 million tons of net cargo per year, for a period of 10 years, between Puerto Galván, in Bahia Blanca, and Añelo.

The companies awarded the transportation capacity will pay a fee of US$0.0225 per ton per kilometre from the operation start date of the railway. This value is for the use of the capacity and does not include payments to the railway operators for transport services.