Playing hard to get with the Hidrovía waterway tender had its advantages last week in chipping down its tolls, a saving of some US$40 million for those using this exit route for over 80 percent of Argentine farm exports (and no small percentage of Mercosur’s), but in a longer term the gratuitous political contamination of what should be a purely technical issue may bring needless complications.
This political contamination has two main sources, both responding to the core of the Javier Milei administration – firstly, the infighting between clusters identifying with Presidential Chief-of-Staff Karina Milei and star spin doctor Santiago Caputo and secondly, the presidential insistence on taking sides in the superpower clash between the United States and China (or at least being seen as taking sides because trade with Beijing is moving along at a steady enough pace – otherwise there would never have been a record trade surplus and export volume last month).
After the crashing failure of the Milei government’s first Hidrovía tender 15 months ago under a cloud of suspicion, the current attempt has yet to conclude with the mistrust far from banished – indeed fuelled on both the international and domestic fronts by the recent rumour circulated by a US dredging firm allied to the competing bidders that Chinese capital and Santiago Caputo lurk behind the frontrunning bid of Jan de Nul. When viewed free from any ideological or political prism, Jan de Nul and its DEME competitor are Tweedledum and Tweedledee – both are Belgian and both operate in a globalised world where Chinese contacts and inputs are virtually universal. In any normal context, the head start enjoyed by Jan de Nul would not arouse suspicions – if possession is said to be nine-tenths of the law, it is 35 percent of the law according to the term of this tender and the Belgian dredger’s 30 years of experience running the waterway would normally convey the kind of advantage enjoyed (or perhaps once enjoyed) by incumbents in politics. But politics has reared its ugly head in the form of ferocious lobbying and there is an outcry about this tender being “steered.”
Yet the tender was clearly flawed from the start for other reasons – if the country’s biggest dollar-earner can only attract bids from two consortia from a country ranking 136th in the world in size, something is wrong. Here international alignment was decisive – the urge to exclude China led to a clause banning any firm with a state shareholding (thus also disqualifying YPF along with CCCC Shanghai Dredging Co. Ltd or others from the Asian superpower). A sense of the dice being loaded led to all other countries staying out, including the Dutch neighbours of Belgium with four centuries of experience in draining their low country.
Dredging rivers is ultimately a technical issue but looking behind the Belgian names is not totally misplaced because both bidders require local business partners. Nor did the political contamination start this month with the US Embassy’s concerns or the sniping over Santiago Caputo allegedly attempting to inject into the Hidrovía his buddies from Martindale (a gated community far less in the news than the Indio Cúa of Cabinet Chief Manuel Adorni but perhaps also worth a probe) – as long ago as eight years, Paraná River dredging ceased to be merely a matter of waterway management when Jan de Nul’s local business partner Gabriel Romero emerged as one of the whistleblowers in the ‘Cuadernos’ notebook corruption trial, confessing to paying kickbacks to the Cristina Fernández de Kirchner administration in order to retain control of the key transportation route.
Nor is the international concern out of place because the Hidrovía is not only an exceptionally long waterway (nearly 3,500 kilometres) but the commercial lifeline of one of the world’s most productive agricultures central to Southern Cone economies – not much less important for Mercosur than for Argentina. Nevertheless, the main concern in this tender should not be the local or international loyalties of the bidders but always the bids themselves – especially the tolls whose reduction would be a relief for local farmers still burdened with export duties. How is that lobbyists, embassies, provincial governors, lawyers, libertarian trolls and every man and his dog seem to have more say in this issue than the farmers whose production gives this waterway the reason for its existence? This tender has been a political orphan with alarmingly little concern when postponed but perhaps it should be considered at least as important as the Cabinet chief’s properties and trips abroad.
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