Evo Morales and the nationalization of the Bolivian railways

In another move to further extend government control over his country, Bolivia’s leader Evo Morales announced this week that he would nationalize the country’s railroad systems.

Currently, Bolivia’s railroad network extends nearly 4,300 kilometers. But rather than a single unified network, it consists of two separate systems. The eastern network links the Santa Cruz region with both Argentina and Brazil while the western system hooks the capital of La Pas to Chile and Peru.

Currently, plans exist for a railroad connecting Santa Cruz and Cochabamba. The feasibility and funding for this improvement are under debate.

The Bolivian government owned the country’s largest railroad company, Empresa Nacional de Ferrocarriles, until 1995, when it was capitalized. At that time, the country sold a majority share in to the Chilean company Cruz Blanca.

That, in turn, led to a discontinuation of most passenger routes — including lines to La Paz — in favor of freight service. The western portion of the railway to the Chilean company Luksic Group, and in 2000 sold the eastern portion to the U.S. company Genessee & Wyoming Inc.

The extreme Andean terrain and elevation makes cross-country transportation a problem. While Bolivia has more than 60,000 kilometers of roads, only about 4,000 kilometers are paved. Although there have been efforts to extend the amount of paved roadway – until they are successful the railway system will remain a key component for development.

Moreover, the country’s landlocked situation keeps transportation costs high in comparison with it’s neighbors – a drag on economic development. And the transportation corridors are a key strategic piece to the country’s political situation. The blockage of the primary highways was an important element of the protests that brought Morales to power.


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