Railway Bill Submitted to Congress

On March 18, 2015, the Federal Executive Branch (“FEB”) submitted a bill to the House of Deputies that declares the policy of recovering passenger and cargo railways, in addition to the renewal and improvement of rail infrastructure, to be of public interest and a high-priority federal objective (hereinafter, the "Bill").

The submission of the Bill had been announced by the President in the opening speech of Congress’ ordinary legislative term, on March 1, 2015.

On March 25, 2015, the Bill started being considered by the Transportation, Public Works, and Budget and Treasury committees of the House of Deputies.

1. Main Provisions

In addition to the abovementioned declaration of public interest, the main provisions of the Bill are as follows:

1. It establishes a series of principles on railway policy, including the administration of railway infrastructure by the FEB, and public and private participation in the provision and operation of the public rail transport services.
2. The FEB is authorized, inter alia, to terminate and/or renegotiate concession contracts executed with certain concessionaries, in order to “resume the full administration of railway infrastructure” and the “management of the systems of control of train circulation”.
3. It opens up access to the national railway infrastructure in the operation of freight transport services. To this end, it provides for the creation of a Registry of Freight Operators.
4. It creates a new State-owned company called Ferrocarriles Argentinos Sociedad del Estado which will have as its main goal the integration and articulation of State companies which already intervene in the sector.
5. The FEB’s current shareholdings in the following companies will be transferred to Ferrocarriles Argentinos Sociedad del Estado: i) Administración de Infraestructuras Ferroviarias Sociedad del Estado, ii) Operadora Ferroviaria Sociedad del Estado, iii) Belgrano Cargas y Logística Sociedad Anónima, and iv) various cargo transport concessionaries.

2. Basis and Purposes of the Bill

As indicated in the Bill, its objective is “the definitive recovery of the administration of railways by the State” and it is founded on the “central idea” that the State “can manage even more efficiently than the private sector”.

In the Bill it is stated that “the ensuring of passenger and cargo railway public transport service is a function of the State that cannot be delegated”.

3. Preliminary Comments

The Bill consolidates an increasingly interventionist policy of the State as regards railway transportation.

The Bill establishes general policy principles, so that, if approved by Congress, the effective extent and impact of the amendments provided therein will be determined by the regulations to be enacted by the FEB.

In the short term, it is important to follow the legislative process closely, since changes or additions may be introduced to the Bill.