Argentina Launches Privatization of Belgrano Cargas Railway Network

The Argentine government has officially launched the privatization of Belgrano Cargas y Logística S.A. the state company operating the Belgrano, San Martín, and Urquiza freight lines. The process involves 50 year concessions for approximately 7,594 kilometers of operational tracks across 16 provinces. To ensure the viability of the project, the government has established a minimum investment floor for mandatory works ranging between 800 million and 1,000 million US dollars, which must be completed within the first five years.

The bidding process utilizes an open access model. Under this system, the concessionaire is responsible for administering and maintaining the infrastructure and collecting tolls from operators, rather than being required to operate the rolling stock themselves. Bidders will be evaluated based on a formula combining the proposed maximum toll and the amount of committed investment. The government also allows winners to access the Regime of Incentive for Large Investments (RIGI) to obtain tax and customs benefits.

To fund the transition, the government will create a trust of up to 500 million US dollars from the sale of rolling stock. Additionally, the government has sought international financing support. The International Finance Corporation and BID Invest have reviewed the project, while the United States Development Finance Corporation and Exim Bank have been engaged for potential loans, particularly for the purchase of American equipment.

A key provision in the bidding documents prohibits participation from companies controlled directly or indirectly by foreign states. Multiple reports indicate this clause is specifically intended to exclude Chinese state owned firms. The government justifies this move by citing the strategic nature of the infrastructure.

Official diagnostics highlight a severe inefficiency in the current system. Currently, less than 5 percent of Argentina's total cargo is transported by rail, compared to 20 to 25 percent in reference countries. The government aims to increase this share to 25 percent by breaking a vicious cycle where low cargo density leads to poor maintenance, which in turn drives customers toward truck transport. For example, a trip between Santa Fe and Chaco currently takes nine days, a duration the government believes could be reduced to two days with the planned improvements.