The Megaproject Could Upgrade Logistics Across El Salvador
Overview
President Nayib Bukele announced that his administration would sign agreements with the private sector to implement a PPP model for an infrastructure megaproject widely known as the “Pacific Train.”
Financing is expected to come from:
- Domestic public resources from the Salvadoran government
- Private foreign investment
- Multilateral loans
Discussions continue with private investors and multilateral lenders to complete financial closure. While information is scarce, government officials have touted the corridor as a flagship infrastructure project that will:
- Upgrade the infrastructure for logistics in El Salvador
- Enhance supply chains
- Improve logistics quality to meet regional standards
“The train will not only become a new transport modality for cargo and passengers but also a catalyst for development,” officials said.
What Will Pacific Train 2026 Look Like?
Initial details of the megaproject suggest that construction will be performed in phases, with the first development focusing on a corridor between the Port of Acajutla and Sitio del Niño, one of Central America’s largest industrial parks specializing in logistics in El Salvador.
Highlighted features from this first section include:
- 63 kilometers (39 miles) of rail corridor
- Several cargo stations and container yards along the Port of Acajutla
- Agreements with terminal operators to improve efficiency logistics in El Salvador and freight movement
- Sitio del Niño serves as a hub for passenger trains and cargo services
- Seven passenger boarding stations along the corridor
- 12 bridges built to pass through seasonal rivers
- 17 rail crossings with safety components (bridges/tunnels or signalized intersections)
Cost estimates for this first phase are USD 300 million, and officials have dubbed it a pilot project meant to validate technical hypotheses, operations model, and consumer demand.
“From Acajutla to Sitio del Niño, we want to show that rail transport is feasible, it can compete favorably with other transport modes, and that it’s a sustainable option for logistics in El Salvador,” said the Ministry of Public Works and Transportation.
Connecting El Salvador with Central America and North America
Officials have positioned the project as a regional initiative that could, in future phases, connect:
- To San Salvador
- Cross-border connections with Guatemala and Honduras
- Mexico’s Maya Train megaproject
If brought to fruition, these connections could allow for an uninterrupted rail corridor from Mexico to Honduras. Not only would this help improve connectivity across Central America, but it could also help improve El Salvador’s connections with supply chains traversing North America and Central America.
“This project is just one of many that the Salvadoran government is pushing to turn the country into a regional hub for logistics,” said a representative from Invest in El Salvador.
Pacific Train Route in the Context of National Infrastructure Plans
The railway project is only one component of the Salvadoran government’s expansive national infrastructure plan. Officials have set a goal to attract USD 10.7 billion dollars in infrastructure-related investments by 2035. Investments will focus primarily on improving:
- Port capacity at Port Acajutla
- Construction of a new shipyard at La Unión
- Regional ferry services
- Roads, airports, and digital infrastructure
In combination, these investments are expected to allow the government to establish a comprehensive logistics ecosystem and enhance El Salvador’s intermodal capabilities.
Pacific Train Financing Likely to Come Through PPPs
While early phases are expected to be predominantly publicly funded through domestic resources, future operations could be undertaken through PPPs that will allow foreign investors to participate in the operation and financing of the railway. Groups that may participate through these PPPs include:
- Infrastructure development firms
- Railway operators
- Investment banks
“Public-private partnerships are key in infrastructure projects, especially in developing countries,” said Juan Pablo Cordoba, lead analyst at Infrastructure Finance Corp. “Through PPPs, you can share risks with the private sector and learn from international best practices.”
When Will the Project Begin?
President Bukele plans on having financing secured before the end of his second term in office (2024–2029). An official start date for construction has not been released as work is still being performed on:
- Final financing details
- Independent feasibility studies
- Approvals from pertinent government agencies
Infrastructure megaprojects have become a hallmark of Bukele’s economic policy to drive FDI into the country and create employment.
“The biggest signal you can send to investors is mega-projects,” Gabriela Rubinstein, Lead Economist for Central America at XYZ ThinkTank. “Building roads and railways tells politicians and investors you’re in it for the long run, and you’re committed to performance.”
Investment at an Economic Level
Implementation of the Pacific Train project could provide an instantaneous boost to various sectors of El Salvador’s economy by:
- Decreasing logistics costs for producers
- Increasing export competitiveness
- Improving passenger mobility and transportation alternatives
- Cutting greenhouse gas emissions by moving freight transportation from road to rail
- Opening up access to Port Acajutla from industrial parks located along the corridor
- Creating jobs in engineering, construction, logistics, and supporting services
“Trains have played a key role in the development of many industries throughout history,” said Alberto Palau, Principal Consultant at Arellano Engineering. “Trains open up economic geography and make certain areas more economically attractive for firms to develop operations.”
Risks to Consider Before Investing
Investors interested in the opportunity should know that there are risks associated with the project such as:
- Financing (both the railway and USD 10.7 billion national infrastructure plan)
- Ensuring technical feasibility
- Land acquisition and potential environmental impacts
- Coordination with Guatemala, Honduras, and Mexico
- Long-term operational sustainability
“It’s not enough just to build these mega-projects,” said Luz Maria Arce, Transportation Policy Consultant. “If you don’t have enough demand or don’t operate it efficiently, you will not see the expected results.”
Conclusion
The Pacific Train could serve as a transformative megaproject for El Salvador, creating a rail corridor from its southern port to major industrial parks and potentially linking up with rail networks from neighboring countries. By upgrading logistics in El Salvador, the country may be able to position itself as a Central American leader in logistics and distribution.
While only the first phase has been formally announced, the Acajutla–Sitio del Niño corridor should be viewed as a first step towards a much larger plan of modernizing El Salvador’s infrastructure and connecting the country to supply chains from around the world.
“The train of the Pacific is much more than a railway that will unite different points in El Salvador,” said a Salvadoran official. “It is a vision that will unite El Salvador with the world.”