Infrastructure, News

Public-Private Partnership opportunities in Argentina’s railway sector

Private participation in public developments has been growing for the last two years, when Argentina improved the legal framework of the Public-Private Partnership (PPP) law.

Many initiatives have been announced since then, and several projects planned for the next 10-15 years are related to railway transportation.

The most recent ones were announced by the undersecretary of Railway Transportation, Arturo Papazian, and the President of Ferrocarriles Argentinos Infraestructura, Guillermo Fiad. These government officials led the first presentation of the Infrastructure, Investment and Public-Private Partnership talks 2018 organized by the American Chamber of Commerce in Argentina, along with the British and Canadian chambers.

Papazian and Fiad presented the current situation, future developments and investment opportunities in country’s railway infrastructure.

According to the undersecretary of Railway Transportation, the infrastructure bidding and investments will be aimed at the transformation, development and modernization of the railways in Argentina.

Among the investment opportunities, Fiad mentioned the refurbishing and reopening of the Maldonado rolling stock workshop in the province of Buenos Aires. A similar project was recently assigned to TMH Argentina, the local subsidiary of Transmashholding of Russia.

Regarding the freight train sector, it is expected to receive USD 13.3 billion over the next 12 years. Papazian indicated that the Proyecto Ferrocarril Norpatagónico, which connects the port city of Bahía Blanca (Province of Buenos Aires) with the city where the Vaca Muerta formation is located, Añelo (Province of Neuquén), will receive private participation.

Expectations for this project’s investment are at USD 500 million and will be destined to the improvement and construction of the railways. The date of the bid has not yet been set.

One of the major Public-Private Partnership projects in the railway sector in the metropolitan area is the massive construction of the Red de Expresos Regionales (RER), by which the trains that reach the City of Buenos Aires will all be connected in a Central Station.

This project will be divided into three phases: The first one -to be developed this year- will connect the Roca, San Martin and Mitre railways and will involve an investment of USD 2.9 billion.

The second phase, to be developed in 2019 by a unique contract, will connect the Sarmiento and Mitre railways, with an investment of USD 1 billion.

The dates of the tenders and the beginning of the last phase are yet to be determined. This phase will connect the Belgrano Sur and Norte railways and is expected to have an investment of USD 1 billion.

Although some of the biddings have already been announced, these are the main private investment opportunities foreseeable in the next two years in Argentina’s railway infrastructure.

Enrique V. Veramendi

Partner

C.V.

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