Dec 23, 2025
Argentina to Privatize Rail Network to Boost Exports
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Argentina plans to boost grain and mineral exports by privatizing its former rail network, which according to industry leaders, will halve freight costs from distant regions to ports. The privatization of the network is part of President Javier Milei's plan to transfer struggling state-owned companies to private hands to attract investments.
Modernizing Argentina's rail system will be a huge challenge. According to Alejandro Nunez, president of the state-owned Belgrano Cargas y Logistica in an interview with Reuters, the volume of cargo carried by train today is lower than in 1970 although agricultural production has increased almost six times during the same period.
The Belgrano Cargas network includes three lines that stretch for nearly 8,000 kilometers and currently carry 7.5 million tons of cargo per year of which 60% are agricultural products and derivatives. An additional 11,000 kilometers are currently out of service.
In Argentina, most of the cargo is carried by highway. Rail freight transport accounts for only 5% of the total compared to 20% in Brazil and more than 40% in the United States and Canada. At least half of Argentina's agricultural production occurs more than 300 kilometers from Rosario. Transporting one ton per truck costs between 7 and 9 cents per kilometer while rail transport costs less than 5 cents. The reduction of freight costs could contribute to the expansion of agricultural production in the north and west of the country.
Privatizing can help reduce transportation costs from farms in the north and west of the country to ports around the city of Rosario. Currently, the cost per ton to transport cargo from the province of Salto to Rosario is higher than the cost to send it from Rosario to Vietnam.
According to local news reports, companies interested in bidding for the modernization project include Mexico Transport Group, a consortium of Bunge Global, Cargill Inc., Louis Dreyfus Co., Association of Argentine Cooperatives, Aceitera General Dehera SA, and miner Rio Tinto.