New Argentine President Set To Privatize Key South American Waterway
Javier Milei, the political outsider, onetime economist and talk show host who was just elected president of Argentina, has promised sweeping free-market economic reforms to try to halt Argentina’s crippling inflation rate of 146 percent. Decades of economic mismanagement have left 40 percent of the population in poverty.
One of Milei’s top priorities, he has said, is privatizing the Paraná Paraguay Waterway, a significant artery of Argentina’s economy, currently managed by the General Administration of Ports SE (AGP). This move, being watched closely by those involved in exporting American soybeans, is being orchestrated by Guillermo Ferraro, Milei’s pick for infrastructure minister. According to the Breaking News Network, Ferraro is “renowned for his wealth of experience in both government service and the private sector.”
It’s not the first time that privatization of the waterway has been considered. Privatization proponents want the waterway to pay for itself instead of requiring government subsidies. Former Transport Minister Guillermo Dietrich drafted a bidding document based on a 3,000-page study commissioned by a group of private port operators, but the bid was never carried out, and the waterway was nationalized under President Alberto Fernández.
The Paraguay and Paraná rivers jointly form a 3,302-kilometer waterway system connecting Argentina, Brazil, Bolivia, Paraguay and Uruguay. The Paraná River is the continent’s second largest after the Amazon. It is a major transportation route between the continent’s interior and the Atlantic Ocean through the Rio de la Plata, as important to the countries it borders as the Mississippi River is to the American Midwest. It carries about 80 percent of Argentina’s soybean exports to the world. It also carries 80 percent of otherwise landlocked Paraguay’s total trade.
Argentina and Paraguay have been feuding for months over tolls on barges Argentina has imposed to help defray operating costs. Paraguayan barges that choose not to pay have been seized. Argentina claims its tolls lie well within the scope of the several treaties that govern the waterway’s operation. The Santa Cruz Agreement, signed in 1980 by the countries that shared the waterway, regulated its operation and governance. In 1992 came the Waterway River Transportation Agreement, prompting the creation of the Paraguay-Paraná Waterway Intergovernmental Committee (CIH), the waterway’s interstate organization and cooperation forum. The increasing institutionalization of the waterway complemented the 1992 Asunción Treaty that created Mercosur, South America’s common market.
Milei has said that his privatization scheme would leave all existing tolls untouched. He plans to travel to Paraguay shortly after his December 10 inauguration to discuss the issue with Paraguay’s President, Santiago Peña.
Luis Zubizarreta, chairman of the CPPC, told Transport & Cargo magazine that the waterway needs entrepreneurial operation and maintenance financed by cargo tolls without any state disbursements.
