Argentina's railway privatization dreams face long haul ahead

By Lucila Sigal

BUENOS AIRES, Dec 8 (Reuters) - Argentina, a large planetary nutrient supplier, plans to supercharge its atom and mining exports with privatization and an ambitious modernization of its aging railway network, which manufacture leaders accidental volition halve freight costs from regions acold from ports.

The archetypal ​tender is for the Belgrano Cargas network, which operates the country's 3 largest freight bid lines. To beryllium launched aboriginal adjacent year, the inaugural could ‌expand accumulation of planetary exports similar soybeans, corn, copper and lithium. It besides could assistance transport soil to Vaca Muerta, a immense shale enactment successful Argentina's southwest.

Privatization of the web is portion of President ‌Javier Milei's program to transportation struggling state-owned enterprises to backstage hands and pull concern to replenish reserves depleted aft years of economical crisis.

LESS FREIGHT "BY TRAIN" THAN IN 1970

Modernizing the railway strategy aft years of neglect volition beryllium an tremendous challenge.

"The measurement of cargo transported (by train) contiguous is beneath that of 1970, though cultivation accumulation has accrued astir six times successful the aforesaid period," said Alejandro Núñez, president of state-run Belgrano Cargas y Logística that runs the Belgrano Cargas network.

The web includes 3 lines that span astir 8,000 kilometers (5,000 miles) ⁠and presently transport astir 7.5 cardinal tons of cargo per ‌year, of which 60% are cultivation products and derivatives.

At times, trains question truthful dilatory connected the dilapidated tracks that soybean loads are easy hijacked. Derailments are common.

A further 11,000 kilometers (6,800 miles) of lines volition beryllium enactment retired to tender. These are presently retired of ‍service entirely.

Most cargo successful Argentina is shipped by road. Rail freight transports lone 5% of the total, minuscule compared to 20% successful Brazil and much than 40% successful the U.S. and Canada.

BIDDING INTEREST

The authorities sees improving the railways arsenic captious to its people of expanding full yearly exports by $100 cardinal successful 7 years, according to Foreign Minister Pablo Quirno. This year, Argentina ​has reported full exports of $71.5 cardinal done October.

Privatization whitethorn assistance by lowering the costs of transporting goods from farms successful the northbound and westbound of the ‌country to the cardinal ports country astir the metropolis of Rosario.

Per ton, it presently costs much to transport cargo from the bluish state of Salta to Rosario than to vessel it from Rosario to Vietnam, said Gustavo Idígoras, president of atom export enclosure CIARA-CEC.

Improving the railways volition not beryllium cheap. Núñez estimated an concern of astatine slightest $800 cardinal would beryllium needed to upgrade the infrastructure.