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Belgrano rescue

01 May 2006

ON APRIL 18 President of Argentina Néstor Kirchner signed a decree placing operations at Belgrano Cargas SA in a 'state of emergency' for a period of 180 days.

During this period, which can be extended for two similar terms, the government will provide funding to meet essential expenses, including the wages of the 1500 employees.

The decree also empowers the Transport Secretary to proceed with amending the concession contract held by Unión Ferroviaria since 1999 with a view to bringing on board new shareholders. It is expected that 70% of Belgrano Cargas will be transferred to the Macri and Roggio groups, Emepa and Sanhe Hopefull Grain & Oil of China, who are proposing to invest 860m pesos (RG 3.06 p113), with 12% remaining in the hands of Unión Ferroviaria and 8% held by the government.

Train drivers' union La Fraternidad would hold 4% and a similar stake would be transferred to the lorry drivers' union headed by Hugo Moyano, a move which has been sharply criticised by La Fraternidad as well as politicians representing areas in northern Argentina served by the Belgrano network. n