Argentina railway privatisation faces long haul

Argentina’s government is pressing ahead with plans to privatise its ageing national rail freight network as part of President Javier Milei’s wider push to shrink the state and attract foreign capital. Officials argue that reviving rail is essential to lowering logistics costs, which have long eroded the competitiveness of the country’s powerful farming and mining sectors.

The first stage of the programme is expected to centre on Belgrano Cargas, which operates large stretches of freight track across the north of the country. Years of underinvestment have left much of the network in poor condition, with slow speeds, frequent derailments and rising theft. Rail today carries only a small share of Argentina’s cargo, despite farm output having expanded many times over since the 1970s. The government hopes private operators will bring capital, technology and discipline that the state has struggled to sustain.

Potential bidders are already circling, including major international freight groups and global agribusiness and mining companies that depend on efficient transport to ports. For exporters, the prize is substantial. In some regions it currently costs more to haul crops by truck to the coast than to ship them across oceans. A modernised rail system could sharply cut those costs and help unlock new investment in grain, lithium and copper. Yet the scale of decay means any turnaround will require billions in long term funding and patience from investors.

Political and regulatory risks also remain high. Milei’s reform agenda faces resistance in Congress and among unions wary of job losses, while memories of troubled privatisations in the 1990s still shape public opinion. Even if the tenders proceed on schedule, rebuilding confidence in rail will take years. For Argentina, the privatisation push offers a rare chance to fix a strategic bottleneck, but the long haul reflects how deep the structural damage has become.