A dispute between Uruguay's Ministry of Housing, Territorial Planning and Environment and its employees has halted development of the Ferrocarril Central PPP project, as the National Directorate of the Environment has resolved to suspend all work on environmental authorisations.

The project, which involves the upgrading of the 273km Montevideo-Paso de los Toros railway, was awarded to a Sacyr-led consortium towards the end of 2018. However, the private partners cannot proceed with the development of the project without the Directorate's authorisation.

Ministry officials are currently in negotiations with workers to resolve their disputes. Despite the current situation, the Ministry has reportedly claimed that deadlines for the environmental impact study of the rail project are still on schedule to be met.