China Announces US$7.5 Billion Rail Investment in Venezuela

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Aug. 4 – China’s state-owned Railway Engineering has signed a US$7.5 billion agreement with the Venezuelan Railway Authority to design and build a 471 kilometer rail network throughout the country.

This is China’s single biggest rail investment project and is also Venezuela’s largest non-oil contract. Railway Engineering is likely to transfer its shares in the project to China Railways after construction. This will add about 7.4 percent of total revenues to China Railways each year for four years after completion.

If the project is successful it will  likely to lead to more Chinese rail deals in Latin America. China wants to develop the ability to purchase and move resources and also assist the region with infrastructure developments designed to allow better export capability to the United States.

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