Grupo Mexico Drops Out of Rail Privatisation in Setback for Milei
The company dropped out after rejecting Argentina’s open-access rail model, leaving a consortium led by Cargill and Bunge as the leading contender.
- On Wednesday, Grupo Mexico announced it will not bid for Argentina's state-run cargo rail operator Belgrano Cargas, dealing a significant setback to President Javier Milei's privatization efforts.
- Argentina's "open access" rail model, which mandates shared track usage among multiple operators, became a dealbreaker for the company. The government refused to repeal the 2015 law supporting this structure, rejecting Grupo Mexico's preference for vertical integration.
- Grupo Mexico had proposed a $3 billion investment alongside Pittsburgh-based Wabtec Corp to modernize the network. Currently, only 7,600 of 14,000 kilometers of Belgrano Cargas rail are operational, with less than 5% of Argentina's freight moving by rail.
- The tender process continues with a consortium of Argentine rail operators and grain exporters, including Cargill Inc and Bunge Global SA. These companies remain the primary contenders for the privatization contract.
- Investments in the rail system qualify for the RIGI program, which offers tax breaks and legal guarantees to potential investors. Despite Grupo Mexico's departure, the government remains committed to Milei's privatization plan to boost agricultural exports and reduce logistics costs.
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16 Articles
It is a setback for President Javier Milei's efforts to attract investment through privatizations
The holding company had ratified its interest, pledged US$3 billion in investments and announced an alliance with the American Wabtec; it did not explain the reasons for its decision
Grupo Mexico had promised to invest USD 3 billion and had the financial support of United States agencies; sources close to the company confirmed the decision, although they did not specify the reasons
The main foreign business group concerned did not comply with the tender documents.The concession for 50 years begins to be defined from 11 November. Local companies and a consortium of cereals companies remain in competition.
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