A new era for rail freight transportation in Uruguay

March 17, 2022 – 3:05 pm

The DBCC Transport consortium, led by Deutsche Bahn International Operations, has been contracted to operate a freight line in Uruguay. The project is part of a major government investment program centering around a new pulp mill. Niko Warbanoff, Chairman and CEO of the DB E.C.O. Group, traveled to Uruguay to see the project for himself.

Freight transportation on rail in Uruguay: José Luis Falero and Niko Warbanoff
Uruguayan Minister of Transport and Public Works José Luis Falero (left) and Niko Warbanoff, Chairman and CEO of the DB E.C.O. Group (right), met to mark the start of construction of a new maintenance depot in Juanico, Department Canelones, Uruguay

Running 273 km (approx. 170 miles) from the center of the country to the port city of Montevideo in the south, the freight line promises to provide a lasting stimulus for Uruguay’s economy and labor market. Beginning in 2023, two million metric tons of pulp will be transported by rail here every year. But before that can happen, the line needs to undergo an extensive renewal in accordance with the highest safety and environmental standards.

On Wednesday, the Uruguayan Minister of Transport and Public Works José Luis Falero, and the Mayor of Canelones Prof. Yamandú Orsi symbolically broke ground in Juanico, Department Canelones, Uruguay, on the construction of a new maintenance depot on the line. The ceremony was also attended by Niko Warbanoff and representatives of DBCC Transport. “We are delighted to support this economically significant and sustainable project in Uruguay with the combined rail expertise of the DB E.C.O. Group,” said Warbanoff.

The international consortium is responsible for modernizing the line, and once the modernization project is complete, it will handle rail operations and maintenance of customized freight cars and traction units. DBCC Transport consists of the Spanish construction company Cointer Concesiones, Uruguayan logistics specialist Christophersen Group and Deutsche Bahn International Operations, which is part of the DB E.C.O. Group. DB Engineering & Consulting, also part of the DB E.C.O. Group, is responsible for construction supervision during the line modernization.

Efficiency from mill to port and the rest of the world

The client for this major project is the Finnish forestry and paper group UPM, which is building a new, state-of-the-art pulp mill in Paso de los Toros, Uruguay, as part of a government investment program. The freight line will directly connect the mill to newly built port terminals in Montevideo. The direct connection will enable efficient transport of the pulp, which is in high demand around the world, especially in Europe and Asia.


DB E.C.O. Group

DB E.C.O. Group
Torgauer Strasse 12-15
10829 Berlin

The project is part of an important economic program in Uruguay. It is expected to create 10,000 long-term jobs and increase gross domestic product by 2 percentage points. Modernization of the railroad line will begin a new era of rail freight transport in the country. In addition to pulp, other raw materials will also be transported by train in the future. AFE, Uruguay’s state-owned rail administration company, began working with private companies to develop scenarios for shifting freight traffic from the Uruguay River and road to rail in 2021.

Stakeholder management and strict environmental requirements

The program to build the pulp mill and port terminals and modernize the rail line was developed by UPM in a dialogue with local stakeholders and communities. Uruguay has strict environmental legislation in place. The environmental impact of the program has been assessed by government authorities and will continue to be monitored once operations begin. The pulp mill’s plantations, which are planted with quickly and sustainably renewable eucalyptus, were established on former pasture land and have not replaced native forests.

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