Argentina says purchase of Chinese trains on track

BUENOS AIRES Jan 15 (Reuters) - Argentina said on Tuesday that two trains made in China will be operating by year's end as part of a $121 million contract signed by the two nations in August 2006.

The purchase will include two locomotives and 12 passenger cars, in a broader deal for Argentina to buy 24 locomotives and 160 passenger cars from state-owned Chinese firms over two years, the Argentine Transportation Secretariat said in a statement.

The first two trains will run on the San Martin train line that leads from Buenos Aires to the city's northern suburbs. More than 3.5 million passengers travel on this line a month.

The government said 85 percent of the contract is being financed with a 10-year loan from China, which has a two-year grace period and an annual interest rate of 4.99 percent.

The Industrial and Commercial Bank of China (601398.SS) (1398.HK) is the deal's lead manager, with ABN AMRO AAH.AS ABN.N and the Agricultural Bank of China also participating. (Reporting by Lucas Bergman, Translating by Hilary Burke, Editing by Phil Berlowitz)