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Argentina: The national government nationalizes the Paraguay-Parana Waterway for at least one year

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In brief

By means of National Decree No. 427/2021 (“Decree“), published on 1 July 2021, the National Executive Power granted the General Ports Administration (AGP), a State Company, the concession for the maintenance of a signaling system, dredging and re-draining tasks, and hydrological control of the Paraguay-Paraná Waterway (“Waterway“) for a period of 12 months, or until it is awarded by another entity through an international bidding proceeding.

By means of the Decree, and after several years of the Waterway under private control, the Argentine president modified the bylaws of the AGP and granted it the concession of the Waterway (“Concession“) for a period of 12 months, extendable until a new awardee assumes control.

In this sense, the Ministry of Transportation (“Ministry“) will be the competent authority to prepare, sign and approve the future concession contract with the AGP (“Contract“), which must include the following: 

  • Term. The Concession will be for a 12-month term as from the expiration of the current 90-day extension granted to the existing concessionaire, Hidorvía S.A. (Resolution 129/2021 of the Ministry).
  • Extension of the term. The Concession may be extended until it is granted to future awardees under the international bidding indicated under Decree No. 949/20.
  • Tolls. The Contract must include regulation regarding the financing mechanism and tariff basis of the tolls that will be collected by the AGP. Also, the procedure for an eventual revision of rates and/or tolls has to be regulated, taking into consideration the participation of different stakeholders.
  • Capacity to affect or disaffect sections of the Waterway. The AGP may divide the Waterway into different sections to be able to affect or disaffected them, totally or partially, in relation to the different services provided in the Contract.
  • Capacity of AGP to contract relevant services. To guarantee the current navigability of the Waterway and maintain the quality of service, the AGP must enter into contracts with different dredging and similar sub-contractors.
  • Obligation of subcontractors to hire employees. The contracts with subcontractors must include the condition that such subcontractors must hire employees under Collective Bargaining Agreement No. 1366/14 who were providing services for the current concession.
  • Control authority. The Contract must include the designation of the competent controlling authority and its scope.
  • Others. Also, the Contract must regulate: (i) the rules of the assets granted in concession and the AGP’s obligation to carry out an inventory; and (ii) the works to be executed and their technical parameters.

The temporary Concession of the Waterway by AGP will be, in principle, for 12 months and the AGP will be permanently in charge of guaranteeing the navigability of the main Waterway and maintaining the provision of services until a new awardee assumes the control.

Click here to access the Spanish Version.

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Adolfo has been a member of the Management Committee of Baker McKenzie’s Buenos Aires office since 2013 and the managing partner of that office since 2021. He has extensive experience working on corporate and commercial transactions for companies in the oil & gas, mining and natural resources industries. Adolfo has authored several reviews for various publications — including Sweet & Maxwell — usually involving Argentinean investments and mining.

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Luis Dates is a partner in Baker McKenzie´s Buenos Aires office. He practices public law, litigation, alternative dispute resolution and international and domestic arbitration. He has represented and continues to represent several clients in ad hoc arbitral proceedings, as well as in proceedings administered by local arbitral institutions, such as the Buenos Aires Stock Exchange Market Arbitral Tribunal, the Buenos Aires Grain Market Arbitral Tribunal and the Private Center for Mediation and Arbitration and international institutions, as the ICC.

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Ezequiel Artola is a partner in the Energy, Mining and Infrastructure Practice Group in Buenos Aires. He advises clients on a variety of complex transactional, general commercial and regulatory matters, with emphasis on mergers and acquisitions, joint ventures, commercial agreements and corporate practice. Ezequiel was assistant professor of commercial and civil contracts at the Universidad de Buenos Aires, and has written articles related to mining, oil and gas, and distribution and agency agreements.

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