The Paraguay and Parana Rivers jointly form a 3,302 kilometre waterway system (the Paraguay-Parana Waterway) that connects Argentina, Brazil, Bolivia, Paraguay, and Uruguay. It is a major transportation route for goods from the continent’s interior to the Atlantic Ocean including: manufactured products, grains, oilseeds, oils and by-products, ore, minerals, steel and petroleum.
The Argentine Government has been talking about launching an international tender to modernise its section of the waterway for some time, including dredging and signalling work. The work carried out on the waterway since the beginning of the 90’s has enabled the growth of Argentine exports from its agricultural sector and has allowed some regional economies to significantly lower their logistics costs.
Despite the obvious benefits, the release of the specifications for the tender has been postponed indefinitely. In parallel, there is increasing debate about whether the waterway should be nationalised.
A lawyer, specialised in the maritime industry, believed that nationalisation was a non-starter, “It is absolutely necessary that dredging continues to be carried out by private companies with proven expertise. The equipment is expensive, and the state does not have the necessary infrastructure or technical knowledge. Furthermore, in Argentina we already saw how the system was in the early 90s, before the concession was put out to tender, we shouldn’t go backwards. Not only should the execution of the works be done by the private sector, the maintenance and financing should too.”
“It is absolutely necessary that dredging continues to be carried out by private companies with proven expertise.”
Maritime lawyer, Argentina
Most experts agree that the development of the project should continue with the collaboration of both private and public institutions. A spokesperson for the Inter-American Development Bank said that private investors should continue to finance specific facilities of the Hidrovía such as gas pipelines and ports while states should coordinate and fund environmental and integration initiatives.
Meanwhile, the delays continue for an infrastructure project which could meaningfully benefit the Argentine economy, a maritime executive explained, “The substantive issue is the level of state participation, this is why there have been delays. The idea was that by the end of the year the new concession would be operating but at this point that looks unrealistic.”
“The idea was that by the end of the year the new concession would be operating but at this point that looks unrealistic.”
Maritime executive, Argentina
Currently, the concession is operated by a Belgian company, Jan de Nul, jointly with Emepa, a local company. For the tender that the government would soon launch, it is expected interest from the main 4 or 5 international companies, of Belgian, Dutch or Chinese origin. The maritime executive elaborated, “There will be a European presence [in the bidding], and also some Chinese participation. The companies that are being talked about are Jan De Nul (current concessionaire) and Deme Group, both from Belgium, Royal Boskalis and Royal Van Oord, these 2 are from Holland, and the Chinese Shanghai Dredging Company. There is not much more than that on a global level, and I don’t think the government will exclude any credible company.”
The Rosario Stock Exchange called on the government to create an independent body to oversee the technical aspects of the tender, formed by both public and private stakeholders. This body would also control expenses and timings of the works while, at the same time, it would grant legal certainty to international investors.
Let’s hope Argentina can run a clean process …