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Big news on long-discussed plans to create a new rail connection between Panama and Costa Rica. Officials announced this week that construction is set to begin in January 2026 on the 475-kilometer line from Allbrook in Panama City to Paso Canoas on the Costa Rica border.

The rail connection with Costa Rica is seen as a key ingredient to “transform travel and trade in Central America by connecting economies and slashing transit times,” Tico Times reports. The route will include 14 stations for passengers and cargo, creating a new link to the fast-growing western regions of Panama. (Check out Playa Caracol.) 

The train is expected to reach speeds of 180 km/h, cutting the trip to three hours. Planners are also looking at extending the route further into Costa Rica. For cargo, the train will reduce the route from San José, Costa Rica, to Panama from 36 hours to nine hours.

“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.

The route from Panama City to Penonomé has already been planned under initial contracts, while the Penonomé-David-Paso Canoas section will be finalized by September 2025, the Tico Times reports. The route will include at least 70 bridges, including one over the Panama Canal.

The rail line is expected to cost between $4.1 billion and $5 billion. And there will be challenges. Complex terrain and land acquisition could delay progress, boosters note.. 

The master plan for the route, developed by AECOM, is due in mid-2025, which will help establish final costs and timelines.