2023-09-03 12:20:18
There is no crack here. From 2012 to date, officials from the governments of Cristina Kirchner, Mauricio Macri and Alberto Fernandez applauded and showed the arrival of loans from China to modernize the railway infrastructure as their own achievements.
Everything accelerated on February 22, 2012 when the train accident known as the “Tragedy of Eleven” claimed the lives of 52 people, one of whom was pregnant, and injured 789 others.
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Given the seriousness of the facts, and the tests that showed serious flaws due to the low investment in infrastructure and rolling stock, the government of then-president Cristina Fernández de Kirchner withdrew the concession from the company Trenes de Buenos Aires (TBA).
The State took over the operation of the Sarmiento line and proposed to urgently update the rail system for both passengers and cargo in the face of pressure from users amplified by the media.
The arrival of China as an “emergency financier”
It was necessary to show quick reaction, but that implied an immediate financial disbursement from the always exhausted Treasury coffers. The Chinese government appeared in this scenario in its well-known role as emergency financier.
Almost overnight, an agreement was launched between the Ministry of Transportation and the China National Machinery and Equipment Import and Export Corporation (CMC). It consisted of a USD 2.4 billion loan, mainly financed by the Industrial and Commercial Bank of China Limited (ICBC) and backed by the insurer Sinosure.
China gave out loans that have secret clauses. (Photo: Argentine Trains)
In 2020, the loan was extended with another USD 4,695 million to intervene 3,384 kilometers of tracks of the freight rail system in 13 provinces, in addition to USD 490 million for the acquisition of rolling stock.
The latest announcement, from June 2023, celebrated with much fanfare that China Railway International Group CO. LTD. (CRIG) will participate together with Trenes Argentinos Infraestructura in the modernization and electrification of Belgrano Norte.
Directly controlled by the Chinese Communist Party, this firm was debarred by the World Bank in June 2019 for misconduct under the East-West Highway Corridor Improvement Project in Georgia.
The detail of agreements with secret clauses
With interest rates much higher than those of the market, numerous secret clauses and taking advantage of Argentine emergencies, these loans set in motion a perverse mechanism that in the long run will be a boomerang with serious consequences for our railway system.
Can the funds from Beijing be used, for example, to buy trains or tracks in Belgium, the United States or France? In no way, they should only be used for the acquisition of tracks, rolling stock, spare parts and turnkey Chinese technology.
Also read: The IMF revealed that the swap with China was used to pay private bondholders and that the second tranche was not activated
In this way, it is clear that the People’s Republic did not generously lend money to Argentina to modernize its trains, in fact what it did was finance its own railway industry. And incidentally, they mortgaged us in the future by forcing us to buy the spare parts for the locomotives and wagons they sold us.
The problems are already presenting themselves and they are not easy to solve because there is no training for the Argentine railway workers to repair these trains and locomotives, in addition to the fact that the contracts establish that the spare parts must be purchased from the Chinese for a period of 20 years.
China appears as an emergency funder in extreme cases of countries. (Photo: REUTERS/Florence Lo)By: REUTERS
Due to this situation, and because less than five months after its use, several formations began to break, railway workers denounced on social networks with photos and videos how O km wagons are scrapped to obtain spare parts immediately.
Meanwhile, China puts us in debt and then asks us for favors, strengthens its industry and ensures better transportation of the products it needs.
An emblematic case is the investment of USD 1,300 million in Jujuy by two Chinese giants of the lithium industry such as Gotion High Tech and Tianqi Lithium in association with local companies. It is that, to ensure the transport of this production, China Development Bank finances for US$ 2,100 million the purchase of rails, sleepers and wagons, of course manufactured in China, for the modernization of the trains of the Belgrano Cargas Railway.
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