In January 2nd, 1988 the State Railway Administration (AFE) withdrawn all train passenger services in Uruguay.

In 1993 local passenger services were reinstated on two sections of the Montevideo-Rivera main line: Tacuarembó-Rivera and Montevideo-25 de Agosto. The first service has been withdrawn since then four times, due to the inability of the state railway enterprise to reduce operating costs and increase passenger numbers, added to a wrong cost assignement that went against their economically balanced operation.

Freight trains operate in all lines of the network with the exception of branches from Salto to Artigas and Cuareim, Nico Pérez-Melo, Mal Abrigo-Colonia, Rocha-La Paloma, Florida-KM 329 and Durazno-Trinidad. Several sections of track currently in service are in good condition, and part of it has been rehabilitated in recent years, with exception of the Algorta-Fray Bentos and San Carlos-Rocha lines that are in poor condition. The sections with older rails (1889-1892) will be renewed soon with 50 kg/m rails recived from Russia between 1998 and 1999. All lines have 1435mm gauge.

The longest through lines reach an extension of about 500 to 600 km one way; the total length of the network is more than 2900 km and reach nearly all the important cities and most of the rural communities of the country whose population is around 3,5 millon.

The system of primary roads connects all major cities; however, the secondary routes vary from tarred roads to paths, most of them in poor condition and are not transitable during rainy weather.

LFU is an Uruguayan-Swiss project established in 1996 in order to reintroduce rail passenger service in as many lines in Uruguay as possible in order to contribute to the development of the country, the domestic tourism and to provide public transportation to rural communities. It is a private project without any govermental subsides. All the studies for the project are doing voluntarly by the members of the work group.

In 2001 LFU has proposed to the Transport Minister and to the State Raiway Administration to take over the Tacuarermbó-Rivera service and repair the Brill railcars used in the service, paying a fee to run over the AFE tracks and another for the vehicle use in a US$/km in commercial service basis. Also a new service from Tacuarembó to Piedra Sola and an increase of Rivera-Tranqueras service has been proposed. Unfortunately, an offer concerning railbuses built in 1984 by BREL which have been withdrawn from service recently has been lost because of the slow process of opening the access to the network to private operators. Using second hand railbuses from another source, LFU has studied a two phases project to restore passenger services in another lines after track renewal. These railbuses will also replace the Brill railcars in the Tacuarembó-Rivera and Tacuarembó-Piedra Sola services.

After restore service with railbuses will start the second phase of the project, which includes the purchase of additional rolling stock suitable for long distances like the X 4500 railcars of French Railways (SNCF). The railbuses will remain in service during 12 to 16 years, reaching a total age of about 26 to 30 years. The railcars will run during 10 to 14 years. On the third phase of the project, LFU envisages the purchase of new rolling stock, preferably from a builder in a neighbourhood country. Also the rehabilitation of remaining lines not included on the previous phases will be studied. Below, links to maps of the network and main features of some of the lines considered.