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Agri giants eye Belgrano Cargas concession as government finalizes privatization plan
🇦🇷 Argentina /Economy & Trade

Agri giants eye Belgrano Cargas concession as government finalizes privatization plan

From La Nación · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Named sources New plan
  • The Argentine government is finalizing plans to privatize the Belgrano Cargas railway network, a key logistics asset.
  • A consortium of major grain traders, including Bunge, Cargill, ACA, AGD, and LDC, is vying for the 50-year concession, facing competition from Mexican firm Ferromex and Argentine infrastructure companies.
  • The privatization will divide the business into track administration, workshops, and rolling stock, introducing an open-access system to allow multiple operators on the same network, requiring hundreds of millions of dollars in investment for modernization.

Argentina's government is nearing the final stages of privatizing the Belgrano Cargas, the nation's primary freight railway network. This move is attracting significant interest from major players in the grain trade and logistics sectors.

A consortium formed by agricultural giants Bunge, Cargill, Asociación de Cooperativas Argentinas (ACA), Aceitera General Deheza (AGD), and Louis Dreyfus Company (LDC) has emerged as a key contender for the 50-year concession. However, they face competition from Mexico's Ferromex and Argentine infrastructure firms like Grupo Roggio.

All companies involved in foreign trade are heavily invested in logistics. The interest, honestly, is to make producers more competitive so they can produce more.

— Source close to the business groupExplaining the motivation behind the consortium's interest in the Belgrano Cargas concession.

The privatization plan, currently undergoing final review in the Ministry of Economy, aims to divide the operation into three distinct components: track management, workshops, and rolling stock. A crucial element of the new scheme is the full implementation of an open-access system, allowing various operators to use the same railway infrastructure upon payment of a fee. This could enable separate companies to manage infrastructure and operate trains, or for a single group to handle both if successful in multiple bids.

Companies interested in the concession acknowledge that the project's appeal comes with a substantial investment requirement. Estimates suggest that modernizing the Belgrano Cargas will necessitate hundreds of millions of dollars. This includes mandatory infrastructure upgrades, acquisition of new locomotives and wagons, and enhancing overall transport capacity. "All companies involved in foreign trade are heavily invested in logistics. The interest, honestly, is to make producers more competitive so they can produce more," a source close to the business group told LA NACION. The Belgrano Cargas is seen as a significant opportunity, particularly for improving access in regions far from the ports, where rail transport holds greater potential than trucking.

The Belgrano represents today the greatest opportunity due to its influence over the regions furthest from the ports. The train will hardly compete within 400 kilometers of the ports because Argentina is very truck-oriented. But to the north, there is enormous potential for growth.

— Source close to the business groupHighlighting the strategic importance and potential of the Belgrano Cargas network, especially for northern regions.
DistantNews Editorial

Originally published by La Nación in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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