South America's new transcontinental railway is considered to be one the biggest infrastructure projects of the century and is also known as the "Panama Canal on railway tracks." A 3,755-kilometer land connection is set to be built between the continent's Atlantic and Pacific coasts.

Bolivia is a landlocked country, so the Andean nation is especially keen on getting the ball rolling soon. Bolivian President Evo Morales met Swiss President Doris Leuthard to sign a memorandum of understanding on the construction of the transcontinental railway.

Morales met with representatives of German and Swiss railway firms, and Germany's State Secretary of Transport, Building and Urban Development, Rainer Bomba. After the meeting, Bolivia's president tweeted, "Our meeting with the Swiss-German consortium was very productive. (...) In January, the technical secretariat begins its work."

The transcontinental railway will connect three South American countries: Brazil, Bolivia and Peru. The line will run from the Brazilian port city of Santos on the Atlantic coast through Bolivia to the Peruvian port city of Ilo on the Pacific coast. Other South American countries including Paraguay, Argentina and Uruguay are interested in a connection as well.

"The transcontinental railway is an important geostrategic project for South American countries," says economist José Alberti from the Bolivian export association CADEX in an interview with DW. "It will improve integration and infrastructures on the continent, foster transatlantic networking and make access to Asia better." Alberti points out that "this project will reduce time and costs. Furthermore, new services will be created with respect to international trade and they will boost the competitiveness of the countries in the region."

The planned route starts on the eastern coast of Peru and stretches across Bolivia on its way to Brazil's eastern coast at Santos

Faster trade route to China

Apart from bolstering South America's domestic market, the transcontinental railway has been designed to transport goods across South America and out of the continent - especially to China, which is already Brazil's largest trading partner and most important export market, apart from the USA. According to a study conducted by the South American infrastructure initiative IIRSA, the time needed for transport between Brazil and China will be cut significantly from 67 to 42 days compared with the route through the Panama Canal.

"Rapid access to the Pacific Ocean and Asian markets is extremely important for Brazilian exports. But the same is true the other way around," says Paula Pena, a historian and museum director from Santa Cruz in Bolivia. "The train will not only pay off because of the transport of goods but also passenger travel. Imagine Europe without a decent railway route - that is our reality."

"It is a project with consequences that reach far beyond the economy," says José Alberti. "It will have a major impact on society, as it will also create many new jobs." The economist says that starting in 2050, millions of tons of goods will be transported annually on the railway line.

German and Swiss experts are in demand

Around half of the line will run across Brazil, 340 kilometers on Peruvian soil and 1,521 kilometers will run through Bolivia. The train will have to travel across rough terrain: mountain slopes in the Andes, rivers and flood-prone regions.

The environmental challenges are exactly why Bolivian President Morales is interested in the extensive expertise that Switzerland and Germany are known for. It is expected that German and Swiss companies will help work on construction and also provide material and maintenance.

All three South American countries have greenlighted the project. The new train line will be inaugurated in 2025, just in time for the 200th anniversary of Bolivia's independence.