Central Railway involves rebuilding the 273km line linking the port in Uruguay's capital Montevideo with Paso de los Toros, where Finnish paper producer UPM is building a new pulp mill.

The line will also be used by passenger services between Montevideo and 25 de Agosto.

The line will be double-track for the first 26km from Montevideo and single track thereafter with 12 passing loops. Infrastructure will be built to accommodate 22.5-tonne axleloads and a maximum line speed of 80km/h for freight trains.

The PPP project is being implemented by Grupo Vía Central, a consortium of Saceem (Peru), Sacyr (Spain), Berkel (Uruguay), and NGE (France) under an 18-year design-build-operate-maintain concession.

The Inter-American Development Bank approved a $US 500m financing package for the project in April.