Major news out of South America - this week the government of Argentina and a consortium led by the French high speed train builder Alstom signed the contracts to build a high speed rail link between Buenos Aires, Rosario, and Córdoba - some of Argentina's largest cities.
Patrick Kron, Alstom’s chairman and chief executive, said construction would start before the end of the year and last for four years. Alstom, which designed and built France’s TGV, Spain’s AVE and South Korea’s KTX, is providing the rolling stock, signalling and maintenance to the Veloxia consortium, which also includes Iecsa and Emepa of Argentina and Spain’s Isolux Corsan.
The total project, financed by French bank Natixis, will cost some $3.7bn and Argentina will issue 30-year debt. Alstom’s share of the project is worth around $1.7bn. The project is five to eight times cheaper than similar ones in France or Spain, Alstom says.
Eight double-decker trains, with a capacity to hold 509 passengers each, will travel at a maximum 320 kph (200 mph), linking Buenos Aires and the city of Rosario, a major port, and the city of Córdoba.
Alstom, which says Argentina’s flat pampas are ideal terrain for a high-speed train, is aiming for 1.5m passengers a year and is confident the total will be higher. President Cristina Fernández called the project – which has been criticised as an extravagance when Argentina’s local train network urgently needs revamping – as ”a leap into modernity”.
This is not just significant because Argentina is going to beat California to having the first true high speed rail line in the Western Hemisphere. It's also important because it shows economic and fiscal difficulties don't have to stand in the way of "a leap into modernity." In late 2001 Argentina's financial system experienced total collapse, and the economy soon followed. Banks shut down, mass unemployment emerged, and the nation's standard of living plummeted. The worst is over, but Argentina has still not yet made a full recovery from the crisis even after six years. High speed rail will be a major boost for their recovery, and will provide sustainable, stable transportation - and therefore solid economic growth - for many decades to come.
Latin America's rail networks aren't in great shape, and in some cases are worse off than even the US. It's a farsighted step for Argentina, which has learned from its economic crisis that dependence on the IMF and an oil-based economy are not good ways to promote sustainable economic growth. California would do well to emulate Argentina's model.