THE long-running saga of concession renegotiation in Argentina took a sudden and unexpected turn on February 3, when a last-minute legal challenge from consumer group UUC prevented the new contracts for the Mitre, Sarmiento and Urquiza commuter networks (RG 2.99 p65) in Buenos Aires from being signed into law. The judge later found that the renegotiation process for these three contracts had been unconstitutional, as the government had not involved the users of the services in question as required under Articles 42 and 43.

The government was able to win over UUC by arranging a public meeting for March 15, to discuss the contracts and that for the Belgrano Norte, before the parliamentary privatisation committee when the challenge was made. But further delays were to emerge. Unwilling to risk contempt of court, the committee refused to accept the new contracts for the Roca, San Martín and Belgrano Sur networks on February 26, and sent all the documents, some 1000 pages in all, back to the government.

The committee has yet to approve new contracts negotiated with freight operators Ferroexpreso Pampeano and Ferrosur Roca (RBR 99 p42). The successful challenge mounted by UUC may encourage shippers and provincial governments to try their luck before the courts. Acting with five other provinces in the north of Argentina, the province of Salta secured important changes by challenging the transfer of Ferrocarril Belgrano Cargas (RG 2.99 p66) to a union-based operating consortium.

The new operators are now expected to start work before May 1, with a provincial committee monitoring how US$250m of government subsidy is spent over the next five years. The provinces also secured the right for other freight and passenger operators to use the Belgrano network upon payment of access charges.

  • During an official visit by President Herzog of Germany, representatives of Adtranz, Ferrostaal and Siemens met on March 4 with Eduardo Duhalde, Governor of Buenos Aires province. They discussed the US$600m project to upgrade the Buenos Aires - Mar del Plata route for 160 km/h and build a new line from Dolores towards Necochea and Bahía Blanca (RG 11.98 p760). The project now has the support of Germany’s export credit agency Hermes and a letter of intent from Kreditanstalt für Wiederaufbau to lend the province up to 70% of the cost as a 15-year soft loan. The three suppliers also expressed their interest in the electrification, signalling and rolling stock contracts for Buenos Aires metro Line H, where Thyssen expects to bid for the tunnelling.