Headline: Argentina‘s Government Moves Ahead with Critical Road Privatization Project
Subheadline: In a significant step towards privatization, the government has finalized a decree that will initiate the license bidding process for the main route in the Mercosur, a crucial corridor for regional commerce.
Article:
Argentina’s government is poised to take a significant leap in its privatization agenda, with the impending publication of a decreethat kickstarts the licensing process for the country’s most strategic road route. The document, expected to be published in the near future according to official sources who spoke to Infobae, will mark the beginning of the privatization of more than 9,000 kilometers of highways and routes.
The Main Route of the Mercosur: A Prime Target
The government has chosen to initiate this process with the tender for two key sections of the Corredor 18, comprising the National Routes 12 and 14, as well as the Rosario-Victoria Bridge. Stretching 675 kilometers, this corridor is a vital link between Buenos Aires, Entre Rios, Santa Fe, Corrientes, and the neighboring countries of Brazil, Paraguay, and Uruguay.
A High-Stakes Business Opportunity
The privatization of these 9,000 kilometers of roads and highways represents a lucrative business opportunity for construction companies, attracted by the prospect of collecting toll fees and the potential savings for the state, estimated at USD 6,100 million over the next 15 to 20 years.
A Troubled History and Mounting Pressure
The tender for the Corredor 18 is set to replace the obsolete concession held by Caminos del Río Uruguay S.A. (CRUSA), which has been in place since 1990. The company has been in a dispute with the state since 2009, arguing that it has not received adequate renegotiation or adjustments to its tariffs. In a recent move, CRUSA achieved an agreement with its majority of creditors, following a preventive insolvency process.
While the government maintains its plans to proceed with the new license bidding process, businesses and industries along the route continue to raise concerns about the current state of disrepair. The Confederación Argentina de la Mediana Empresa (CAME) recently dubbed the condition of the routes "deteriorating and alarming," emphasizing the need for urgent repair and maintenance.
Next Steps and Future Plans
The licitation for the Corredor 18 is expected to be finalized in April 2025, paving the way for a second, more ambitious stage. This stage involves the privatization of 8,470 kilometers of roads and highways currently managed by state-owned Corredores Viales, as well as other unconcessioned routes such as the National Route 33 in Santa Fe, National Route 18 in Entre Ríos, and the variant of the National Route 19 in Córdoba. Set to be divided into 11 sections, the public call for this stage is planned for February 2025, with the adjudication scheduled for July of the same year.
In total, 9,145 kilometers distributed across 13 sections will be privatized, representing 20% of Argentina’s national road network but concentrating 80% of its traffic.
Key Metrics and Regulations
When awarding the concessions, the government will prioritize the company that offers the lowest tariff to users, without imposing any canon on the state or subsidies for the companies. The prices of tolls will remain stagnant until the corridors meet optimal transit conditions: pothole-free roads, resurfaced shoulders, horizontal and vertical signage, and lighting. The state will define a tariff ceiling and a quarterly update system, with the specifics outlined in the bidding documents. During the first year of the concession, there will be a period for route upgrades, with toll collection starting in the second year.
Vialidad Nacional will play a crucial role in monitoring and auditing the concessions, overseing the companies’ compliance with quality and maintenance objectives. Regular inspections will assess road conditions, signage, and other essential safety and transitability elements.
As Argentina forges ahead with its infrastructure privatization plans, the road sector awaits the promised improvements and boost to regional commerce that these large-scale projects aim to deliver.
