Panama will break ground in January 2026 on a railway linking Panama City to Paso Canoas on the Costa Rica border. This 475-kilometer, $4.1-$5 billion project aims to transform travel and trade in Central America by connecting economies and slashing transit times. Here’s the latest on this ambitious plan.
A Faster Way to Connect
The railway will run from Albrook in Panama City to Paso Canoas, with 14 stations for passengers and cargo. Passenger trains, reaching speeds of 180 km/h, will cut the trip to three hours. For cargo, the impact is significant: moving goods from San José, Costa Rica, to Panama now takes up to 36 hours, but the train will reduce this to about nine hours, streamlining trade.
Panama sees this as a way to solidify its role as a regional logistics hub. “The train needs to cover more ground to be commercially viable, and that means reaching Costa Rica,” said Pacifico Escalona, Panama’s ambassador to Costa Rica. Extending the line to Costa Rica—and potentially beyond—could reshape how Central American economies interact. Posts on X highlight the excitement, with users noting the project’s potential to “unite Panama and Costa Rica” and boost the region’s future.
The project, led by U.S.-based AECOM under a $2.2 million contract, includes technical studies, route design, and environmental assessments. The route from Panama City to Penonomé is set, while the Penonomé-David-Paso Canoas section will be finalized by September 2025. At least 70 bridges, including one over the Panama Canal, are planned.
Costa Rica’s Role
The Costa Rican Railroad Institute (INCOFER) confirms private companies are studying a possible extension into Costa Rican territory, which could boost tourism and commerce in areas like Golfito and Puntarenas. Álvaro Bermúdez, INCOFER’s executive president, said these studies explore connecting points to Panama’s railway, with talks advancing on trade integration.
President Rodrigo Chaves has called the idea “profitable and interesting,” a shift from earlier hesitation. “Costa Rica has never ignored this project,” Escalona noted. “INCOFER stays updated on every development.” Panama’s President José Raúl Mulino calls the railway a “strategic” effort to integrate the region, with construction prep already underway.
The railway could decentralize Panama’s economy, sparking jobs and growth in places like David, while offering Costa Rica’s southern regions new opportunities. It also aligns with broader goals: Panama hopes the line could one day reach other Central American countries, providing a land-based trade route for nations lacking Panama’s port infrastructure. This could allow exports to flow through Panama City’s canal and ports more efficiently.
Funding remains a challenge, with costs estimated at $4.1-$5 billion. Complex terrain and land acquisition could also delay progress. Both countries are prioritizing environmental and community impacts, especially in rural areas along the route.
With AECOM’s master plan due in mid-2025, the next year will be critical for finalizing costs and timelines. Costa Rica’s studies could lead to a cross-border link, though no firm plans exist yet. This railway isn’t just about moving people and goods—it’s about building a more connected Central America. As it progresses, it’s catching the eye of neighbors and investors, paving the way for stronger regional ties.
