Grupo México Transportes, a Mexican railway operator and the only foreign company to publicly pursue the sale of Argentina’s state freight railways, withdrew from the tender on Wednesday, three weeks before bids are due on Nov. 11. It had promised up to US$3 billion in investment.
“Grupo México has decided not to go forward in the contest,” the company said in a statement that gave no reason. People close to the company told Argentine media the main objection was the rules on open access: the concessionaire must maintain the track and charge a toll to any operator that wants to run trains on it, with no exclusive right to run the trains itself. They said the company also wanted to bid for the three lines together rather than for the separate parts the government set, and felt the government did not answer its objections quickly enough.
The government has not commented on the exit. Economy Minister Luis Caputo has said the concession will have open access, mandatory investment plans and access to RIGI, the tax and customs incentives for large investments, for track-renewal investments of at least US$200 million.
The company had announced an alliance with the US railway-equipment maker Wabtec and, according to Argentine press reports, had been courting US government financing. With its exit, the main remaining candidate is a consortium of the grain traders AGD, Bunge, Cargill and Louis Dreyfus and the farm cooperatives group ACA, which said after the tender rules were published that it would study them before deciding to bid. The Roggio group, which has rail experience through its Metrovías operator, has also shown interest, and the mining company Rio Tinto has been mentioned as a possible investing partner. None has formally bid.
The concession covers 7,594 kilometers of track through 16 provinces, serving grain and mining regions. Bids are due on Nov. 11 at 9:59 a.m. Winners will be chosen by weighing the investment committed and the maximum toll offered, and must carry out about US$800 million in mandatory work in the first five years, partly paid from the sale of the state company’s locomotives and wagons.
The state put US$112 million into Belgrano Cargas in 2023 to cover its deficit, Bloomberg Línea reported. Questions on the tender documents can be submitted until Oct. 28.