Grupo México Withdraws from Bid to Privatize Argentina's Belgrano Cargas Railway
Cubierto por 3 fuentesPublicado
- Portal PortuarioGrupo México descarta ofertar por operadora ferroviaria argentina
- bichos del campoSe ilusionan las cerealeras: La sorpresiva salida del Grupo México deja al holding agroexportador en carrera para controlar el Belgrano Cargas por el próximo medio siglo
- mas cointainerGrupo México se retira de Argentina por inviabilidad funcional
Grupo México, the conglomerate controlled by businessman Germán Larrea, withdrew its interest in bidding for the Argentine state-owned company Belgrano Cargas. The decision was confirmed by a company spokesperson and represents a setback for Argentine President Javier Milei's plan to attract private capital to modernize the country's freight rail network.
A Bid That Was Leading the Race
The Mexican firm had emerged as one of the strongest international contenders to take over the network, which connects agricultural and mining regions with export ports. Its proposal included a partnership with the U.S. company Wabtec and an investment of up to $3 billion to renew the system, as well as backing from U.S. financial institutions.
The Disagreement Over Open Access
The breaking point was the privatization model chosen by the Argentine government, which calls for an "open access" scheme, under which one operator manages the infrastructure while other operators coexist, paying a toll to run their trains. Grupo México had already warned in July that its participation was conditional on obtaining exclusive control of both the infrastructure and commercial operations, and it ultimately announced it would not proceed with the bid.
The Technical Reasons Behind the Withdrawal
According to a company statement, the open access scheme reduces the possibility of achieving economies of scale, is inefficient, increases costs and requires public subsidies to remain viable, and has led to bankruptcies at other companies that operated under this model in other countries. Grupo México had proposed investing $3 billion to bring roughly 6,200 kilometers of the San Martín and Belgrano lines to a commercially viable condition without requiring state subsidies, whereas the official tender terms call for the State to contribute $1 billion, with the future concessionaire required to request additional state funding whenever repairs are needed across the network's 7,500 kilometers, which also includes the Urquiza line.
Who Remains in the Running
The bid opening is scheduled for November 11, and Grupo México's exit leaves local operators as the frontrunners. Among them is a consortium of agro-export companies that includes subsidiaries of Bunge, Cargill and Louis Dreyfus Company, alongside local firms such as the Asociación de Cooperativas Argentinas and Aceitera General Deheza, as well as Grupo Roggio and the mining company Río Tinto.
The Role of Rail in Argentina's Logistics
Belgrano Cargas operates a 7,594-kilometer network, according to Portal Portuario, or nearly 7,600 kilometers according to bichos del campo, connecting 16 provinces, with the concession to be awarded for the next 50 years. Currently, less than 5% of freight transport in Argentina is carried by rail, resulting in heavy reliance on trucks and higher logistics costs for exporting soybeans, corn, wheat and minerals.
