Speaking at the inauguration of a restored steam train for tourists outside La Paz, Morales said Sunday he intends to recover control of former state rail company Empresa Nacional de Ferrocarriles, or ENFE, privatized in 1996.

"We must begin the rehabilitation of our railways," Morales said, after traveling from the Tiwanaku ruins to Lake Titicaca on the new line. "This inspires us, this obligates us, this is the start of the nationalization of ENFE."

Bolivia sold a majority share in ENFE to the Chilean company Cruz Blanca in 1996, which discontinued most passenger routes - including lines to La Paz - in favor of freight service. Cruz Blanca later sold the western portion of the railway to the Chilean company Luksic Group, and in 2000 sold the eastern portion to the U.S. company Genessee & Wyoming Inc.

The ENFE sale was part of a sweeping privatization initiative in the mid-1990s, when at the urging of the World Bank and International Monetary Fund Bolivia sold its government interests in the oil and gas, water, power, railroad and telecommunications sectors, as well as the national airline and pension plan.

But the privatization has had mixed results and largely failed to spur the economic growth the international creditors sought.

Since taking office last year as the country's first Indian president, Morales has declared his intention to retake control of many former state-run industries.

Morales nationalized the oil and gas sector last year, and has since moved to exert greater state control over the mining industry, nationalizing Bolivia's only tin smelter from Swiss mining giant Glencore.

Bolivia is currently negotiating the purchase of former state telecommunications company Entel from Telecom Italia.