Breaking the monopoly on the railroad to Machu Picchu

After almost a decade, the monopoly on the train route to Machu Picchu has been broken and pair of firms are poised to begin ferrying passenger’s on the famous route.

Access to Machu Picchu is only possible via the 110-kilometer rail line between Cusco and Aguas Calientes. The 90-minute train ride currently costs between $100 and $150 (round trip) although rates change dramatically during the high season.

On Wednesday, Inka Rail was granted access to the route by by Ferrocarril Transandino SA, the company that maintains the route and handles concessions to operate on it.

Inka Rail, controlled by the British-Peruvian company Grupo Crosland, expects to invest $5 million to introduce a three-car train that will carry 150 passengers daily along the route.

Although granted access, the company must now obtain a final license through Ositrain, the agency that oversees Peru’s transportation sector. That process has been significantly relaxed recently to allow more operators to access the rail route, officials said.

For the past nine years only one firm, PeruRail, has been permitted to use the route by Transandino. PeruRail is owned by the Bermuda-based Orient-Express Hotels Ltd.

Last year, Transandino was fined $185,000 by the Peruvian government for operating an illegal monopoly by refusing to sublet trains and other equipment that it rents from the state to any firm but PeruRail.

Another company, Andean Railways, is also pushing for access to the rail route. The proposal is still being reviewed by Transandino. Andean Railways is owned by US-based Iowa Pacific Holdings.

The increased rail access to the site has sharpened concerns about the influx of tourists to the famed ‘lost city of the Incas.’ Last year more than 750,000 people visited the site, a number expected to increase by at least 10 percent this year.