Chile is among the most successful examples in the world of low transit construction costs and relatively quick pace of project development. For the past 20 years Chile has had a continuous stream of transit projects under construction, amounting to over 60 miles of heavy rail in the capital city, Santiago, and one 26-mile light rail line in the Valparaiso region. Lines that are 100 percent tunneled average only $154 million per mile, which is less expensive than tunneling projects in Madrid, whose low-cost subway buildout in the late 1990s and early 2000s is often cited as a major success.

Factors that contribute to Chile’s low transit construction costs include a structured contracting process that encourages competition. Interviewees noted that projects are routinely broken up into several manageable pieces and awarded to different firms to ensure that the project sponsor has leverage and attracts multiple bids. Also, the central government controls planning and funding authority, clearing the way for permitting and limiting local citizen engagement in the overall process. Importantly, Santiago de Chile—the city where most of the country’s projects are constructed—has ideal soil conditions for tunneling.


The Republic of Chile is a unitary presidential constitutional republic and a civil law country. It is highly centralized both politically and demographically in and near Santiago, its capital. Of the country’s 17.5 million people, 5.4 million live in the Santiago metropolitan area. The national government includes a president, who is head of government and state, and a bicameral Congress with a Chamber of Deputies (155 members) and the Senate (43 members). While the capital is in Santiago, Congress officially meets in Valparaiso, approximately 80 miles to the west.  

The country is divided into 16 regions, and each has two or more provinces (54 total) further divided into communes or cities. Each region is led by an intendent, who is appointed by the Chilean president. The regional and provincial governments have little authority over transportation planning or decision-making.   

In 2019, following significant protests triggered in part by an increase in Santiago Metro’s subway fares, the country agreed to write a new constitution to replace the existing one that was crafted and approved in 1980. A new constitution, anticipated in the next few years, could significantly alter the power dynamics for transportation planning and administration.  

Transportation planning, funding, and regulation are highly centralized within the national government. The Planning and Transportation Secretariat (SECTRA) is the federal ministry in charge of evaluating, planning, and authorizing new rail lines.  

The State Railroad Company, EFE, owns and operates nearly all freight and passenger railroads in Chile. EFE directly operates commuter rail services in Santiago and Concepción, as well as limited intercity passenger trains in other parts of the country. EFE owns the Metro Regional de Valparaíso (Merval), a commuter rail line in the Valparaíso Region. Merval is an EFE division but has its own five-member board of directors, appointed by the national government. Santiago Metro is the only other rail network in the country. It is owned and operated by the federal government as an independent corporation with its own seven-member board of directors, also appointed by the national government.  

Chile’s 16 regional governments are divided into 54 provinces. The President of Chile, as opposed to the population of each region, appoints an Intendent to govern the regions and appoints a Governor for each province. Within their limited authorities, regional and provincial governments plan and manage local roadways and small transportation services. But the subnational governments have little planning or funding input in the delivery of rail transit projects. Regions have their own bus networks and coordination agencies that coordinate public and private transit services.  

The private sector’s role in the capital side of rail transit is mostly limited to bidding on construction contracts led by public agencies. Private companies often run bus services in and between cities.

Project planning and regulation

SECTRA plans and evaluates major investment initiatives for transportation at the national, regional, and local levels. Rail transit projects are included in urban transportation plans developed by SECTRA as part of a multimodal approach to transportation within regions. The planning process also involves federal ministries, the regional governments, municipal leadership, and others.  

While the authority lies with the national government, most of the planning work for Santiago Metro happens at the agency. When Santiago Metro develops plans for their system, they confer with SECTRA, which often includes them in their regional and national plans that get official approval and funding. 

The Environmental Law (Law 19.300) sets the main environmental framework, requiring all heavy rail projects to undergo an environmental impact assessment (EIA) similarly to other countries. The project sponsor, either Santiago Metro or EFE, prepares an EIA after the project is approved by SECTRA. According to interviewees, the current process is streamlined in part due to the agency’s experience in preparing these assessments, which take about two years to complete. 

Community engagement, participation, and feedback in Chile are limited. While the planning process does involve elected municipal leadership, SECTRA does not specifically list community engagement as part of its planning methodology. Santiago Metro does host community meetings, and while they are infrequent, lawsuits over projects do happen (and interviewees noted they are increasing).   

Interviews with stakeholders confirmed that planning is highly centralized, and even engagement with the municipal governments is not very extensive. But part of the reason for little public resistance is that the projects have widespread political appeal. In Chile, presidential terms are four years and incumbents may not seek reelection. That means a typical tunneled project, which usually takes 10 years from inception to opening, must continue through three of four presidential terms. The fact that so many lines in Santiago have been completed in the past 20 years, coupled with the fact that presidential administrations frequently alternate between socialist and conservative parties, speaks to the consistent and strong political support for building subways. 

Tunnels in Valparaiso Metro and Santiago Metro are often single bore and do not have physical separation between moving trains, indicating that the country does not follow NFPA 130 fire safety standards. Since almost all Chilean transit projects are completed by Santiago Metro, the agency sets its own standards for fire safety and earthquakes. The system has historically been safe, with no fatal crashes, fires, or incidents caused by operations on urban heavy rail systems in the past two decades. The massive 8.8-magnitude earthquake in 2010, with an epicenter only about 200 miles from Santiago, shut the system down for just three days before it fully reopened.  

Project funding

In part because Chile has succeeded at keeping capital projects relatively inexpensive and because the Santiago Metro system is highly used, normal operations result in surplus fare revenues. Santiago Metro in 2019 reported a $171 million operating surplus, which it used to cover some of the costs of new lines or extensions, with national government grants making up the balance as part of the SECTRA-approved plans.

The funding agreement for individual lines depends on each case, but for recent projects the central government has covered approximately 70 percent of costs, with Santiago Metro funding the remainder with fare revenues.

Project construction

Rail projects in Chile are built by Santiago Metro and managed by in-house staff. They are procured using a design-bid-build (DBB) approach and contracts that include unit costs for additional work beyond the original scope. Contracts are awarded to the lowest bidder after a robust first round of vetting based on experience and methodology for the project. Only qualified and approved bidders can proceed to submit a final bid.

Santiago Metro intentionally breaks the lines into contracting segments of around 1.5 miles and has set policies to allow competition and project resilience. No contractor is allowed to win more than two contracts on a single line, and they are not allowed to win a contract on an adjoining segment. If there is a problem with a contract or contractor, Santiago Metro can cancel the work and award it to another company working nearby.

Tunneling projects in Santiago benefit from a low water table and very stable soils, offering “near perfect” conditions for both cut-and-cover as well as mined tunnels. Most mined tunnels use the New Austrian Tunneling Method, a conventional mined tunneling approach. The new Line 7 project, which began construction in 2021, is the first to use a tunnel-boring machine.


Interviewees and industry sources report that construction for transit projects proceeds quickly and at a low cost for several reasons. Santiago Metro has developed considerable staff capacity and experience delivering tunneled heavy rail lines in the city. The project delivery division at Santiago Metro employs about 190 people, including planners, engineers, and project managers, with around 60 working directly on a single project. With consistent construction ongoing for over 20 years, the agency has hired, trained, and retained talent who are adept at managing large transit projects. Line 7 construction is currently underway, and the central government has authorized an additional $US4 billion for almost 25 miles of new lines and extensions.

Santiago Metro also unbundles its civil construction contracts into small, competitive segments. This invites competition from smaller firms, protects projects from contractor-related disruption, and provides additional leverage to the agency managing the project. While this approach can be more complicated to manage, it appears to be a best practice that has enabled faster and cheaper construction.

Finally, Chile’s centralized control and authority over transit construction appears to help projects proceed quickly and with little resistance. Both culturally and politically, opposition from communities and the process of securing local permits do not appear to be barriers to construction, although, as noted, community engagement is limited.