The commuter rail project for the Asunción metropolitan area, presented as a historic foreign investment for the modernization of public transportation, faces technical and financial questions that cast doubt on its viability and fiscal impact for the Paraguayan state.
Consulting engineer Guillermo López Flores argues that the initiative amounts, in practice, to a disguised sovereign debt with a 30-year term, financed by annual government subsidies. According to him, the project's real "Trojan horse" is the Guaranteed Minimum Revenue mechanism, provided for in the Government-to-Government (G2) agreement, which ensures minimum revenue for the Special Purpose Company (SPE) responsible for building and operating the system.
López Flores maintains that the main risk lies not only in a potential physical failure of the infrastructure, but in what he considers a more "perverse" scenario. He explains that the contractual conditions were shielded by a Special Law approved by Congress, which eliminates the principle of equitable risk distribution between the public and private sectors. "By granting the SPE the figure of Guaranteed Minimum Revenue, the Paraguayan state is signing an unconditional commercial life insurance policy," he states.
The consultant warns that if fare collection does not reach the stipulated financial floor, the government will have to cover the difference with taxpayer funds. He adds that, since the same company estimates demand and designs the system, there are aligned incentives to overestimate passenger flow. "It's a sweetheart deal where the private sector privatizes profits and the state socializes 100% of the losses," he analyzes.
Regarding future operations, the engineer cautions that if the Asunción and Luque stations are not perfectly integrated into a single ticketing and feeder bus system, "the population simply will not use the train." López Flores argues that the debate should be shifted from the political plane of "train yes or train no" to the field of fiscal responsibility.