All Aboard (Again): Paraguay Revives Passenger Train Dream

The Weekly Post | 10.02.26

Paraguay’s government has secured a deal with the UAE to restore an old rail line linking Asunción and Ypacaraí (Photo: Etihad Rail).

TOP STORY

Déjà Vu on Rails

The long-promised suburban train linking Asunción with surrounding cities is back in the spotlight. After negotiations with South Korea fell apart in late 2024, President Santiago Peña announced this week a new partnership with the Emirates, claiming it will finally bring the project off the drawing board.

During a trip that included test drives of Aston Martins and Bugattis, Peña signed a deal under which Paraguay’s (trainless) railway operator Fepasa and the Emirati state firm Etihad Rail will form a joint company to build and operate a 43-kilometer passenger line from Asunción to Ypacaraí.

Initial construction would focus on the first 18-kilometer stretch to Luque, estimated to cost US$400–450 million. Emirati capital would contribute roughly US$150 million, while Paraguayan is on the hook for US$50 million; the rest will be procured through external financing. Studies are slated to begin immediately, with works targeted for early 2027 and then a three-year construction period.

There are just a few problems, however. In 2025, Congress passed a law to govern the Tren de Cercanías that requires a public bidding process — a safeguard to guarantee transparency and competitive pricing. To pave the way for a direct award to Etihad Rail, Congress must first amend the legislation.

Adding to the friction, Etihad Rail itself is not a manufacturer of trains, meaning the locomotives, carriages and other equipment will have to be sourced from elsewhere. Paraguayan officials are spinning this as an advantage — freeing Paraguay from depending on any single producer — but it also underscores how much of the project still depends o contracts that have yet to be negotiated.

On the ground, the biggest roadblock are the rights-of-way surrounding the old railway tracks across the metropolitan area. The 14 metres on both sides have never been fully freed from encroachments: including a stadium belonging to soccer club Libertad, which Horacio Cartes — Peña’s political mentor and ruling Colorado Party chief — presided over and bankrolled (2001–2012). Without major progress on land access, even a fully financed project may fail to materialise.

The government casts the project as a breakthrough investment that would modernise, green, and de-congest Greater Asunción’s transport system. Critics, however, see a recurring pattern: legal impediments being redrawn to fit political ambitions and big promises predicated on unresolved technical questions.

How these tensions are resolved — in Congress, in contract negotiations, and in community engagement over the rail corridor — will determine whether the commuter train becomes reality or another chapter in the long-delayed infrastructure saga.

THE POST TAKE:

If this all feels familiar, that’s because it is.

The sudden resurrection of the Tren de Cercanías is another attempt by the Peña administration to have something to point to after two years of globe-trotting diplomacy, whose tangible returns have so far been thin back home. A commuter train—green, modern, Instagrammable—is an attractive symbol to justify all those taxpayer-funded foreign trips and photo-ops with Scandinavian and Gulf royals.

Back on Track? Paraguay’s Railway Revival Faces Delays

But strip away the rhetoric, and the project already displays several of the warning signs that doomed Metrobús, the Bus Rapid Transit (BRT) scheme launched during Cartes’s presidency that ripped up Eusebio Ayala avenue, bankrupted shops, burned through public trust, and ultimately collapsed without ever carrying passengers in 2018.

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Also in this issue:
Pensions overhaul stalls · City Hall race heats up · Tourism triumph · Border hassles simplified · Cut-price Ozempic smuggling · Black cocaine seized

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