On December 15, the transfer of assets and liabilities from the Railway Company to the Ministry of Transportation, which is the new delegator, will be completed.
The December 15 next is the date on which the company of Ferrocarriles del Ecuador EP (FEEP), which is in the liquidation phase, will transfer all its assets and liabilities to the Ministry of Transport and Public Works (MTOP). This will be the first step in a new process of reactivation of the railway, in which the Government is now committed.
According to the government plan: “Once the liquidation is finished, the MTOP will start the process to generate a public-private alliance with a strategic partner that the railway can operate with conditions of economic, social, financial and operational sustainability ”.
The railroad is also part of the investment portfolio that the Government offered at the Ecuador Open for Business, held a few days ago in Quito, and through which it seeks to attract $ 30,000 million in investments. The idea in this case is to go towards the “Rehabilitation, construction, operation and maintenance of the national railway system”, hand in hand with a strategic partner, with a public-private alliance. The train is not sold, but is concessioned. The deadline to complete the process would be the second half of 2022.
Roberto Salas, new secretary of Public Private Associations and Delegated Management, explained that the multipurpose train is one of the projects that has generated the most interest among investors. Salas stressed that the company Ferrocarriles del Ecuador EP (FEEP) is in the process of liquidation, and that at the moment the delegate that will be the Ministry of Transport and Public Works is appointed. He explained that the Ministry of Tourism was the one that had the railway in its portfolio because it was oriented to tourism, now it changes hands, as the focus it will now have is to transport passengers and product cargo, in order to facilitate and optimize the transfer of agricultural and mining products, although there will also be passengers and tourists.
The summary of the project presented at the Ecuador Open for Business talks about the repowering and rehabilitation of the railway system for the transport of tourists, mass transport of people and cargo, through approximately 965.6 km of existing railway line. With this, it also favors the change of the energy matrix, opening the possibility of using trains with an electric traction system, which favor the decarbonization of the transport system, aligning the country with the commitments acquired internationally towards climate change and sustainable mobility.
According to the data displayed, the railway system has 118.92 km operational, 387.28 km non-operational and 459.60 out of service. In addition, among its assets it has 53 locomotives, 31 operating stations.
For workers and investors, the change of hands of assets and liabilities to the Ministry of Transportation could be a kind of milestone, and they hope that this will change the slow and bureaucratic dynamics that had been taking place in the previous government. Is that behind the rehabilitation project is the human drama of at least 300 workers who were unemployed and who have not yet been liquidated.
Marcelo Tapia, president of the Company Committee of the company Ferrocarriles del Ecuador EP in liquidation (FEEP), explains that after the decision to liquidate through decree 1057 of President Moreno, they began to drag out the process. At the moment they have been unlinked 300 people, but their salaries have not been paid. The wish of the workers is that now an agreement can be reached with the new partner so that they can be rehired. While more time passes, assets also deteriorate faster, he explains. For Tapia, the train can be profitable. Remember that there were errors in the handling of the train in the government of Rafael Correa, since rates were established outside the budget of ordinary citizens. Worse still when it came to the cruise train that was conceived only as a luxury train. For Tapia it is positive that it is now thought of as a transport train in order to make it sustainable. In any case, it hopes that the liquidation process will be agile, to continue with the signing of the concession.
Right now it is known that at the moment there is the interest of several companies, including a Russian, another Peruvian and another American. The latter is Reliance Rail International. Its representative, William Stills, says that since 2019 a letter of interest has already been presented, but regrets that the processes, especially in the previous government, have been very slow. Still, Stills says interest in the project remains. He explains that they have been able to speak with Roberto Salas and have asked him that the new APP regulation, which is about to come out, also be socialized with the private sector. The previous regulation that appears in Decree 1190 of Lenín Moreno was very complex and has not managed to get any public-private process, he explains.
In any case, right now are in the process of signing a memorandum of understanding for cooperation between the Ministry of Production and the Ministry of Transport and Reliance Rail International to deliver the pre-feasibility study and update the cost of the company in conjunction with the Ministry of Transportation and the Ministry of Production at no cost to the State. This agreement, he says, does not commit the State to execute the proposal, but it does advance towards a clear study for the creation of a railway logistics system with the aim of increasing competitiveness and productivity.
The broad proposal raises an investment of $ 2,047 million and a concession for 35 years. The business model includes the construction of 1,525 kilometers of roads to complete four routes: the existing one, a southern mining route, another northern mining route and the Yaguachi-Daule route.
Reliance Rail has had contact with the workers of the company Ferrocarriles del Ecuador (FEEP) and has indicated that if the contract is signed, they would be rehired, since they have the experience and trajectory in handling trains, they are specialized workers, he says.
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