PARAGUAY is studying the reactivation of the disused Encarnación railway as part of a broader strategy to establish a rail freight corridor to the Port of Montevideo in Uruguay via Argentina.
The proposal forms part of wider efforts by Paraguay and Uruguay to deepen trade integration and was discussed during meetings between Paraguayan and Uruguayan officials.
The project involves rehabilitating the international rail link between Encarnación and Posadas, where the railway bridge over the Paraná River remains intact but has been out of service for years. However, the corridor's viability depends on Argentina rehabilitating sections of its freight railway network, granting access rights and participating in trilateral operating agreements to enable trains to continue south to Uruguay.
No investment value or implementation timetable has been announced, and officials say the project will require technical, commercial and financial studies before any rehabilitation work can begin. In addition to funding, agreements would be needed with Argentina covering infrastructure, operations and cross-border freight services.
The discussions coincide with Paraguay's broader efforts to revive its rail sector. Earlier this month, the government enacted legislation introducing a government-to-government procurement framework for the planned Asunción - Ypacaraí suburban railway, enabling implementation of the memorandum of understanding signed with Etihad Rail earlier this year.
