Monday, April 25, 2011

Transport outlay: China demand drives road and rail traffic

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The paintshop at General in Erie, Pennsylvania, has recently seen a growing variety of work. Alongside the familiar colours of the large US railway companies, are the blue and yellow of MRS Logistica, the red and white of America Latina Logistica – both Brazilian companies – and the livery of other Latin American train operators.

The new locomotives, equipped with the latest electronics and fuel-saving technology, are one of the most obvious symbols of a surge of investment in Latin America’s railways.

It is helping turn many rail groups from the battered, inefficient wrecks that limped into privatisation over the past 20 years into slick, modern logistics services providers.

ALL, the largest company, expects to invest $650m (£399m) this year alone, excluding the substantial sums going on construction of a 260km line between Alto Araguaia and Rondonopolis in Brazil.

Private-sector investment is also bringing improvements that should help the region’s roads to cope with the demands imposed on them by growing trade volumes.

The challenge in both areas, however, may be to spread the benefits beyond a few favoured pockets, where investments are especially attractive – particularly Brazil, whose large size, strong growth and plentiful trade flows make it especially lucrative.

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