Open Access Implementation in Railway Transport

I.          Introduction

On May 21, 2015, the Argentine Congress passed Law No. 27,132 which declared the cargo and passenger railways reactivation policy to be of national public interest and a priority issue.

Pursuant to Law No. 27,132 the Argentine Executive must adopt all measures necessary to recover the complete administration of railway infrastructure in the national territory.

In this context, on November 8, 2018, the Argentine Executive Branch issued Decree No. 1027/2018 to advance with the execution of the measures set forth by Law No. 27,132.

II.         Main provisions of Decree No. 1027/2018

Decree No. 1027/2018 seeks to implement an open access railway management system. This system would allow the participation of both public and private open access operators subject to a shift system (“windows in transit”) and the payment of access charges.

The decree establishes a number of parameters and general principles that the implementing authority must execute through the necessary regulatory amendments.

Given the importance of the legal amendments and investments necessary to re-adapt the current railway infrastructure to the proposed open access system, and considering the existence of certain concession agreements, the system will be implemented through a transition process that would allow the objective to be reached in the medium term. Hence, open access would go into effect once the last concession agreement is terminated (unless its partial implementation can occur in advance, once the necessary investments to adapt the infrastructure are completed).

In order to advance with the transition, Decree No. 1027/2018 instructed the Argentine Ministry of Transport to adapt the current concession agreements  to establish the terms of the resumption by the Government of the concession’s infrastructure, which should lead to a renegotiation process with the current concessionaires. Among other items, this process of adaptation of the current concession agreements must include their extension for up to ten years and the investment regime.

III.        Conclusions

Implementation of open access will be a significant change of direction for the Argentine railway system.

This regulatory change may benefit those sectors which are interested in operating railways in Argentina, as well as those that wish to transport commodities and other products on them.  

In this context, it will be essential to follow how the Government will implement and coordinate the system with the existing concessionaires and operators.