Railroad Development Corporation, a Pittsburgh (USA) based company, has focused on revitalizing moribund railroads in Third World countries. RDC's chairman, Henry Posner III, is an entrepreneur who believes that many of these railroads have failed due to poor management and/or lack of investment in the future. He felt that Fegua might be rebuilt into a viable competitor. In particular the parallel, mountainous, mostly two lane highway from Puerto Barrios to Guatemala City was both arguably reaching its capacity, dangerous, and very expensive to widen.
In 1997 the Guatemala government awarded a 50-year concession to the only bidder, Ferrovias Guatemala (FVG), an RDC affiliate, to restore and operate the former IRCA lines. The new company inherited an abandoned 497-mile system that extended from Tecun Uman on the Mexican border to Puerto Barrios on the Atlantic, with a branch to the El Salvador border. The condition of the line was terrible with washouts, rail and ties expropriated for other use, and earthquake damage on the branch to El Salvador. Squatters had encroached on the right of way, creating a social issue for the new railway to contend with. And even before they could begin operating Hurricane Mitch caused further destruction. But FVG was determined, and invested significant money to repair the line between Puerto Barrios and Guatemala City, including major washed out sections.
Commercial rail service in Guatemala was resumed starting in April 1999. The initial operation was a short haul cement movement between El Chile and Guatemala City. In December 1999 the line was reopened between the Atlantic ports of Barrios and Santo Tomas and Guatemala City.
The pictures below were taken in February 2006.