(Bloomberg) -- Argentina published the terms of a long-awaited tender for contractors to dredge its waterway that ships billions of dollars of crops a year to global markets.
The international tender for a 30-year license includes a key provision to deepen the navigation channel in the Parana River, which will allow exporters to load bigger cargoes at the port complex that circles the city of Rosario. Dredgers have until the end of January to submit bids, the government of President Javier Milei announced late Tuesday.
Argentina is the world’s largest supplier of soy meal for livestock feed and soy oil for food and biofuel. But ships frequently run aground as they sail between Rosario and the estuary that leads to the Atlantic Ocean due to low water levels — as shallow as 36 feet in key areas — that have been exacerbated by historic droughts in recent years. That forces Argentina to charter more vessels or top up cargoes at sea ports.
Charterers and exporters have for years lobbied for a deeper channel as part of a broader push by Argentina’s crop industry to reverse a decline in competitiveness against Brazil and the US.
“If we want to develop Argentina, it’s crucial to provide competitiveness,” Luis Zubizarreta, who heads a chamber for privately-run ports and is the local institutional affairs executive for Louis Dreyfus Co., said in a government-distributed statement. “We’re a country with a natural disadvantage because we’re far from markets, so we must have efficient logistics.”
Whoever wins the contract will be required to deepen the channel to 39 feet, which may require billions of investment and environmental permits. A government agency took over responsibility for dredging the Parana in 2021 after the last contract expired, outsourcing the job to Jan de Nul, a Belgian company that has done the work since the 1990s.
Guillermo Wade, head of port group CAPyM in Rosario who’s been involved in talks to draft the tender, said by phone that the deepening will be done gradually and eventually surpass 39 feet.
Dredgers that have expressed interest in bidding in a tender are Jan de Nul, China’s Shanghai Dredging Company, through local unit Servimagnus, Belgium’s DEME and publicly-traded Dutch company Boskalis.
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