Milei will privatize highway management in Argentina

Javier Milei’s government wants to privatize the operation of highways in Argentina, currently managed by the state-owned company Corredores Viales, official sources reported this Thursday (10).

“The government decided to place management in the hands of the private sector to operate and maintain the national highways under concession, which are mostly in the hands of Corredores Viales”, announced presidential spokesman, Manuel Adorni, at a press conference.

Adorni argued that this state-owned company has an operational deficit of US$30 million, which, until December 2023, was financed with resources from the Argentine Treasury and which, since Milei took office on December 10 of last year, has been applying fare increases.

“The company did not comply with minimum operation and maintenance standards,” explained Adorni.

“For this reason, any national or international company that presents the insurance required in each case will be able to participate in the bidding to manage the service more efficiently”, added the spokesperson, who classified the initiative as “an unprecedented opening for the transparency”.

He also announced that preliminary information for those interested in the bidding will be published in the coming days on the websites of the Ministry of Economy, the Ministry of Deregulation and State Transformation and the Department of Transport.

Adorni declared that companies that become concessionaires “will only charge the concession fee when they have put the entire route in condition.”

The Argentine government estimates that the State will save US$5.6 billion and reported that the bidding process will be carried out in two stages.

In December 2024, bidding will be opened for two sections of corridor 18, a highway that connects the provinces of Corrientes and Entre Ríos with the province of Buenos Aires, whose concession expires in April 2025. In February 2025, the second bidding will be made for 8,648 kilometers distributed in 12 sections that represent 20% of the Argentine highway network, but concentrate 80% of the traffic.

In the early 1990s, national highways were privatized through a concession scheme, which allowed different companies to charge tolls and at the same time take responsibility for maintaining the routes.

The 2001 crisis and the subsequent collapse of the convertibility regime and the pesification of tolls affected the economic and financial equation of companies, and the failure to renegotiate contracts led several of them to initiate claims at the International Center for the Resolution of Investment Disputes.

The contracts signed in the 1990s expired in 2003. Since then, the governments of Néstor Kirchner and Cristina Kirchner have applied a mixed toll collection system suspected of corruption.

The government following Cristina’s, under Mauricio Macri, tried to implement public-private participation projects, without success, and in 2019 the state-owned company Corredores Viales began operating as a concessionaire for national highways.