Leolino Dourado
Researcher at the Center for China and Asia-Pacific Studies
Universidad del Pacífico
On July 7, the famous and ambitious Brazil–Peru railway connection project, popularly known as the Bi-oceanic Railway, was formally revived. Two state-owned companies dedicated to transportation infrastructure planning, one Brazilian and one Chinese, signed a memorandum to study the project’s feasibility. Peru has not yet signed, but it is reasonable to assume that it will eventually join this new study, given its history of strong interest in the project and the attention it generates among political and economic elites. In light of this, it is essential to revisit the trilateral cooperation of 2014–2017, which pursued the same objective, in order to draw lessons from that experience.
In 2014, Peru joined Brazil and China in an effort to produce a basic feasibility study for the railway project. The issue was at the center of attention in the media and political circles, but the cooperation concluded in 2017 without the final report being approved by Brazil or Peru, as revealed in our study published in 2023. To identify lessons from the case, in that study we reviewed around two thousand pages of documents related to that trilateral cooperation a decade ago. The principal document was the final report of the basic feasibility study in its four volumes, but it also included bilateral agreements, meeting minutes, and technical notes.
Lesson One: Well-structured trilateral coordination is required. In the previous experience, the three countries did not clearly define the study’s details from the outset, which led to a series of disagreements, particularly over the project’s technical engineering standards. The Chinese company in charge of the basic feasibility study prepared it according to Chinese standards in order to promote Chinese technology. Brazil and Peru, on the other hand, expected it to be conducted with local standards. In the end, no consensus was reached, and this was one of the reasons why the final feasibility report was never approved. It should be noted that the current cooperation effort is already off to a poor start in this regard, given Peru’s absence from the signing of the memorandum mentioned above.
Lesson Two: The feasibility study must be rigorous. It should be obvious that an investment worth billions of dollars requires a solid analysis. However, in the previous experience, as reported by the Brazilian technical team, the feasibility study was riddled with significant deficiencies. For example, the demand projection lacked a clear and well-founded methodology, and it also omitted alternatives to the railway that would compete for the same freight. The environmental impact assessment was also very weak, lacking a detailed examination of possible impacts and mitigation measures. These technical deficiencies were another reason for not approving the earlier feasibility study.
Lesson Three: Sustained commitment is needed. Peru withdrew from the previous trilateral cooperation shortly after PPK assumed the presidency. While this was due to valid concerns about the project’s economic and environmental costs, sustained participation by all parties is indispensable for achieving a conclusive feasibility study.
Lesson Four: Transparency is key. This is indispensable so that public scrutiny can ensure an adequate study that responds to society’s concerns. The earlier experience was very opaque, since one of the agreements included a confidentiality clause that prevented the feasibility study from being shared. Access to the documents was only achieved years after the cooperation ended, following much insistence and several appeals through public information access mechanisms.
It is essential to heed these lessons in order to achieve a sound and conclusive feasibility study.
