This article examines the new conditions set for the privatisation of Belgrano Cargas and Logística S.A., a key player in Argentina’s railway system.
Urgent need for railway reform
The Argentine government’s recent announcement regarding the privatisation of Belgrano Cargas and Logística S.A. highlights the urgent need for reform in the country’s railway system. Currently, Argentina’s railway network transports only 0.6 tonnes-kilometre per kilometre of operational track, significantly trailing behind countries such as Chile, Brazil, and the United States, which boast much higher figures. This inefficiency has resulted in less than 5% of the nation’s freight being transported by rail, compelling the state to subsidise operations to maintain competitiveness against road transport. The government aims to address this gap through a 50-year concession that will allow private entities to manage and maintain the railway infrastructure.
Open access model and investment incentives
The bidding process introduces an open access model, allowing multiple operators to use the railway network without exclusivity. This approach is designed to encourage investment from various sectors, including logistics and agriculture, without requiring the concessionaire to operate trains. The model is flexible, permitting construction firms to bid while offering traditional railway operators the chance to acquire up to 50% of the rolling stock at a set valuation. Additionally, the bidding documents include a clause that prohibits foreign state-controlled companies from participating, a measure aimed at limiting the influence of firms linked to the Chinese government.
Funding and infrastructure improvements
To facilitate necessary infrastructure improvements, the privatisation will employ a trust fund mechanism, ensuring that proceeds from the sale of rolling stock are reinvested into the railway system rather than entering the national treasury. The trust will finance mandatory projects, with repayment linked to the completion of work, thereby incentivising timely execution. The total investment required for essential upgrades across the three railway lines is projected at USD 800 million, with USD 500 million available from the trust and the remaining USD 300 million to be sourced from the concessionaire. This structure aims to ensure that the private sector bears the financial risk while also enhancing the railway’s capacity to meet growing demand.
IN NUMBERS
As the bidding process for Belgrano Cargas unfolds, the implications for Argentina’s freight transport landscape could be significant, potentially revitalising a crucial sector of the economy.
Reported from infobae.com, 2026-08-20. The Tender Wire is published by Otnox.
