THEARGENTINIAN province of Neuquén has started work on the first 13 km of a route from Zapala that it hopes will form part of a 220 km southern rail crossing of the Andes to Lonquimay in Chile.

Construction is being undertaken by Patagonia Ferrocanal SA, formed and funded by the province, which expects to spend 20m pesos by June this year. To fund construction of the 60 km Zapala - Las Lajas route, the province of Neuquén is seeking to secure a US$49m loan from Portuguese lenders.

Promotor Tecnicagua was hoping that its scheme to reopen the Mendoza - Los Andes route between Argentina and Chile would receive official backing at a summit between the two governments due to be held at the end of January. Should the project go out to tender in March, the consultancy believes that construction could start in October for opening in March 2007.