Tunneling through the Andes to speed global trade

All those efforts had government funding. What makes the Andean project unique is that it will be paid for privately by the consortium and through usage fees. The binational commission will provide loan guarantees, but put up no taxpayer money.

Chile's mining wealth and Argentina's agricultural bounty have sustained their economies, delivering positive trade balances year after year, but both countries need to produce and move those exports more efficiently to maintain growth. Chile imported $75 billion worth of goods and exported $81 billion last year, while Argentine imported $74 billion and exported $84 billion, the U.N.'s regional economics commission reported Tuesday.

The project takes its name from nearby Aconcagua mountain, which dominates the border and is the highest peak in the Americas at 22,822 feet (6,981 meters) above sea level.

The train engines, which would be powered by electricity rather than coal or diesel to reduce the environmental impact, are to link a transportation hub in Lujan de Cuyo on the Argentine side with Los Andes, Chile. The tunnels will descend from Punta de Vacas, Argentina, at 7,851 feet (2,393 meters) above sea level, to Saladillo, Chile, at 5,039 feet (1,536 meters), both below the steeper slopes and higher altitudes that get paralyzing snow each winter.

The initial phase would open a single tunnel and cost $3.5 billion with a capacity of 24 million tons of cargo a year. Depending on demand, the capacity could grow to 77 million tons and the total price tag to $5.9 billion by adding a second tunnel and additional rail lines on either side. As many as four mechanical excavators will be used to carve through the mountains.

"It's a multimodal system: It works like a ferry. Each train, about 750 meters long, can transport containers of merchandise and trucks with their drivers as well as other train formations, which would switch locomotives to make the crossing," Posse said. The idea is to enable cargo to make the entire journey between Atlantic and Pacific ports without having to be transferred along the way.

Any megaproject faces difficulties in a region as politically and economically unstable as Latin America. To start with, there's no guarantee that the consortium will win the bid, although Corporation America and Empresas Navieras are corporate leaders in Argentina and Chile, and Mitsubishi is one of the world's largest trading companies.

Posse said there's nothing particularly challenging about the Andes that engineers aren't already resolving in the Alps.

"An enormous amount of understanding has developed in the last 20 years and this is a huge advantage," he said. "What has been learned digging long tunnels is that the most important thing is to be obsessively prepared for what might happen in the field."

And promoters say it will pay for itself and more through cargo fees that companies the world over will gladly pay to speed their products to market.

"We're betting on reducing the travel time to a third of what it is now, and this bringing more profits all around. We're talking about cargo fees that will make the shipments cheaper and Argentine and Chilean exports more competitive," Posse said.