The Argentine government has “effectively” granted Belgian dredging outfit Jan de Nul a “quasi indefinite extension” to their “very strategic” contract to dredge the Parana River system, to the relief of port users throughout the River Plate region.
Argentina is one of the world’s leading corn, soya oil and wheat exporters and key ports such as Rosario are hugely dependent on regular maintenance dredging to keep up the size of vessels that can reach that far upriver. Because of this cargo owners were fearful that the conclusion last year of several long-term contracts with Jan de Nul and their Argentine signalisation partner Emepa might lead to a hiatus in regular dredging.
The port of Buenos Aires (BA), which handles around 1.5 million TEU per annum (more than 90 per cent of all Argentina’s containers), is also greatly beholden to regular dredging to keep a draft of around 10m and prevent too severe draft restrictions for carriers at the “end of the ocean port stop”.
Now an interim solution whereby AGP, the BA port authority, takes over, “in theory”, the running of the dredging has led to a short-term contract being awarded to Jan de Nul to carry on the work until there is a completed bid for a new 10-year contract. Sources say each extra year is worth US$30m to the contractors.
Alfonso Jozami, General Manager, Centro de Navegacion in BA, which represents the interests of shipping agents and the shipping community as a whole, told Port Strategy that the situation is “very complex” since the original dredging contract for Hidrovia SA – a joint venture between Jan de Nul and Emepa – came to an end in June of 2021.
“The way I interpret the situation is that the extended contract, given last year, was for one year or until a new long-term concession agreement is signed,” he says. “And as that is unlikely to happen until some months after the next Presidential elections [in October of 2023], it could run for quite some time to come. It is very important for a port to have its draft clearly defined for carriers to carry out their future planning, and even more so for ports on the Parana today with the series of serious droughts we have been suffering from in recent years,”
Hidrovia SA was set up in May 1995 with a rolling 10-year contract. That contract came under the spotlight in August 2018 when an Emepa director was accused of bribing then President of Argentina, Cristina Kirchner, to get a contract extension back in 2010. Jan de Nul has made it clear that it had no involvement with the latter action and issued a public statement to this effect when the accusations first surfaced.
Jan de Nul has been deploying up to four hopper dredgers on the four key sections of the Parana Waterway and would be favourite to win any future bid, given they have several dredgers already deployed in Argentina.
