COSTA Rica and Panama have signed a memorandum of understanding (MoU) to coordinate development of a cross-border rail link, marking a further step towards integrating the proposed Panama City - David - Paso Canoas line with a wider Central American network.
The agreement, signed by Costa Rica’s Incofer and Panama’s National Railway Secretariat, establishes a framework for joint planning of the project, including engineering studies, environmental assessments and alignment of regulatory and operational standards. The MoU is focused on enabling interoperability and a future physical connection at Paso Canoas on the border between Panama and Costa Rica, rather than committing to construction.
Work to develop the new Panama City - David - Paso Canoas line is progressing through technical development. Aecom is playing a central role, building on its 2025 $US 2.2m contract to update Panama’s railway masterplan, including revisions to route alignment, demand forecasts and cost estimates.
In January, Panama approved a further $US 4.17m contract with Aecom for technical and strategic advisory services, including advancing to 20% engineering design for key sections of the route and consolidating feasibility studies.
The scope of work also includes environmental, market and financial studies, business case development, and conceptual planning for major infrastructure elements such as a potential new crossing of the Panama Canal.
The project remains in the pre-investment phase, with total capital costs for the full corridor still estimated at $US 4.1bn-$5bn, and no final investment decision or construction timeline confirmed.
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