Background Information

Since the early 1990’s, the Government of Argentina has followed an accelerated timetable for privatization of nearly all its enterprises to reduce the budgetary burden of the enterprises, make the firms more competitive, and increase the volume and efficiency of new investment. The port sector in Argentina has felt the push toward privatization as strongly as any other sector. In the past few years, major ports that were under Federal government jurisdiction have been either privatized or transferred to the respective provinces. However, the Federal government retained jurisdiction over the port of Buenos Aires. Therefore, the Federal Government, and Secretariat for Ports and Navigable Waterways, manages the port of Buenos Aires, as well as the navigability of the Rio de la Plata, and is responsible for the maintenance and upgrade of the port.

The Rio de la Plata is the main water transportation artery for import and export cargo in the region extending from the center of the southern cone in South America to the Atlantic. Argentina, Uruguay, Bolivia, Paraguay and parts of Brazil all rely on the river for the bulk of their shipping needs. In 1996, more than 40 million tons of imports and exports were moved along this waterway. Almost 50% of the cargo that is moved along the river consists of containerized cargo and mineral, agricultural and forestry products in bulk shipments.

The increase in trade and the reliance on shipping in Argentina to move cargo has fomented a serious effort by the Government of Argentina to upgrade its ports and river waterways. Nowhere is this more evident than in the major dredging contracts awarded to Belgian and Dutch firms for the Port of Buenos Aires, and the Uruguay and Parana Rivers. The dredging work has created shipping channels and canals that allow more, and larger, ships to sail to upriver ports for delivery of their cargo, and at the same time allows for some of the same ships to carry larger amounts of Argentine exports. Therefore, the efforts of the Government of Argentina in the port and waterways sector speak directly to the need for enhanced avenues for cargo movement, specifically exports to neighboring Mercosur countries and Argentina’s trading partners abroad.

The concurrent increase in vehicle/ship traffic stimulated by the increased depth of many of Argentina’s waterways creates the potential for serious access and navigation problems. Demurrage is the direct result of both an inefficient port and less than adequate channels or waterways. Therefore, the Government of Argentina through its Secretariat for Ports and Navigable Waterways, has placed an emphasis on the port and waterway sector. As part of this effort, in addition to the dredging work already contracted or underway, the government must respond to the need for an advanced navigation system that will provide its ports and waterways with the required access and security for large ships calling on her ports. Thus, VTS is a priority for the Government of Argentina and the Secretariat for Ports and Navigable Waterways. As such, the Secretariat will release the first of three successive bids for the establishment of VTS in Argentina. The first bid, or the VTS at the Port of Buenos Aires will be published in the next few weeks. The VTS for the Uruguay and Parana Rivers will be prepared and released following the selection of the VTS contract for the Port of Buenos Aires. Therefore, Argentina is on the verge of making the first of three important selections of VTS contracts that are estimated to have a total value of $70 million.

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