It is a mark of a great travel book if, by about page 20, you feel the urge to drop everything and catch the next plane out of Heathrow. In Ghost Train Through the Andes, Michael Jacobs didn't have me reaching for my rucksack until page 38 - but only because he starts his quest in Hull. It's there that he picks up the trail of his grandfather Bethel Jacobs, who came from a family of extraordin arily high achievers and celebrated eccentrics. Among their ranks were engineers, poets, musicians, clock-makers and philanthropists. One Jacobs built the first underwater tunnel beneath the Hudson River; another lived a double life with a Hebridean crofter's daughter.

Little wonder, perhaps, that Grandfather Bethel felt immense pressure to prove himself. An engineer by training, he was determined to make his mark on the world. So, as a young man, he shipped out to the New World to help build the Chile-Bolivia railway. In Hull, Jacobs discovers dozens of letters Bethel wrote to his fiancée, Sophie - his first cousin - in which he recorded his travels in South America before the First World War. This rich seam of family history provides his grandson with the impetus to follow in his footsteps. And like his grandfather, Jacobs can't shake the dust of Hull from his boots fast enough.

The unfolding narrative skilfully weaves the journeys of grandfather and grandson, separated by almost a century. Jacobs, who lives in a remote Andalusian village and is in love with all things Hispanic, seeks to connect with his grandfather through their common association with the Latin world. He is certainly well qualified to make this journey, being a high achiever himself (he has written some 27 books) and an unabashed eccentric (in his forties, he lived for five years above a Spanish village disco). He feels immediately at home in South America, which he describes with relish as a place "where Indian legends, Spanish fantasy and the sheer strangeness of so much of the environment have somehow contrived to make reality inseparable from poetry, whimsy and the supernatural".

Arriving in Chile, he takes a gruelling bus ride north through all 12 of the country's temper ate zones. Eventually he reaches Antofagasta, where he sets out to follow his grandfather's railway deep into Bolivia, a country perpetually on the verge of yet another revolution. Jacobs is adept at making friends, and talks the line's owner, the Antofagasta and Bolivia Railway Company, into allowing him to travel its length, even though long stretches are now closed to passenger traffic.

The journey that follows is like a trainspotter's fantasy. Michael Jacobs spends long periods squeezed into engineers' cabins and riding up front with the drivers. At other times, he finds himself crammed into ageing carriages with local smugglers of leather jackets and cocaine. In Bolivia, he discovers that much of the track has fallen into disrepair, so he sets off on foot, wading through rapids and narrowly escaping death in a mudslide.

Jacobs's prose is peppered with descriptions of the unforgettable characters he meets along the way. He seems at home in any environment - one minute hobnobbing with the elite, the next chatting with old peasant women and fortune-telling witches. Many of those he befriends offer him help and hospitality with a generosity of spirit unimaginable in the west today. The most memorable is Ricardo, his guide in Bolivia, a shameless womaniser who carries around a small box of natural "Andean Viagra" in case of emergencies. Ricardo is also an aficionado of Bolivian cuisine. Day after day, he subjects "Mr Meechell" to feasts of barbecued guinea pig, dried lama and chuño, potatoes frozen overnight in a field and stamped on repeatedly when thawed.

But Jacobs's one constant companion through out his journey is Bethel. The author manages to track down many of the places his grandfather stayed and worked in (despite people pointing him in the direction of another engineer called Jacobs), matching his progress through territory that remains some of the most hostile and striking anywhere in South America.

Jacobs's honesty about his grandfather's character provides a telling dimension to this multi-faceted narrative. Although he writes about him with affection, the two men prove uneasy and often incompatible travelling companions. Bethel's motivation for going to South America was to make his name and fortune, and to help forge new frontiers. His views about the "natives" bordered on racist - "they live the most stupid, inane lives" - and for him the European presence was a civilising force. During his time in Chile and Bolivia, Bethel was never happier than in the company of his fellow Brits.

Jacobs, by contrast, embraces South America with the hot, lustrous spirit of carnival. Even when he's travelling through the Atacama, the "saddest desert in the world", where his grand-father was worn down "physically and mentally", he feels "neither sadness nor fear but a mounting elation".

The only thing that does get Jacobs down is the inequality he sees wherever he goes, the indigenous people remaining third-class citizens compared to those of Spanish descent. A passionate admirer of Che Guevara, whose trail he crosses in both Chile and Bolivia, he feels a sense of guilt as the grandson of someone complicit in the exploration and exploitation of the continent. When he handles a watch that belonged to one of the soldiers killed fighting alongside Che, he doesn't want to let go of it, hoping "it would absolve me of some of my guilt".

Ultimately, Jacobs is in a unique position to be able to judge the legacy of his grandfather's generation, which, like the railway line, brought incalculable change. More than anything, this book highlights the cultural idiosyncrasies that have developed as a result of western incursion. South America has not turned out as Bethel had hoped. But for his grandson, blessed with an empathetic curiosity, that makes the place all the more intriguing.

Tarquin Hall is the author of "Salaam Brick Lane: a year in the new East End" (John Murray)