Gallardo told Peruvian newspaper Diario Correo on March 19 that a tender for feasibility and design studies will be launched by the middle of the year for the 23.2km tunnel from Rio Blanco to Yauli.

The tunnel would reduce the journey time between Lima and Huancayo, the capital of Junín region from around 12 hours to less than five hours.

The project will be implemented as a public-private partnership, with $US 800m coming from the Peruvian government and $US 1.2bn from private sector investors.

The tunnel is included in Peru's new National Railway Plan (PNF), which is now complete and due to be published within the next few months.

Peru's Congress decreed in 2012 that the tunnel was a necessary investment and the government awarded a contract in July 2013 for preliminary studies.