Interview: Guillermo Dietrich
To what extent have transparency and compliance been promoted in the public tendering process?
GUILLERMO DIETRICH: One of the first and most important mandates was the eradication of corruption in public administration, supported by all government members. The Ministry of Transport (MoT), having one of the largest budgets due to heavy investment in infrastructure, has a particular responsibility to support these efforts.
We have changed the tender and purchasing processes, opening doors for more local and international companies to apply for infrastructure projects. We have eliminated bureaucratic impediments that added unnecessary costs and undermined our overall competitiveness as a country. Since 2016 we have been able to save more than $4bn on road infrastructure tender projects, achieving a much lower cost per km.
What are the aims of the Aeroplane Revolution Plan?
DIETRICH: An empirical measurement shows that while Latin America’s air transport grew two- or even threefold since the early 2000s, Argentina’s only expanded by 30%. We have concluded that the number of air passengers in Argentina can easily double in the near term. To this end, we are following the guidelines of the Aeroplane Revolution Plan, which has three key pillars.
The first is strengthening Aerolíneas Argentinas as the domestic flagship carrier. We aim to do this by maintaining professional management and lowering state subsidies from $700m to $90m, with the intention of fully eliminating them by 2019. Aerolíneas Argentinas has grown 40% since 2016, and as a result of this progress, it’s considered an attractive company in the region, open for international business collaboration.
The second pillar is facilitating the entry of new airline companies to the local market, which – as opposed to the rest of the region – has remained completely closed since 2006, with no new players involved. We now have several low-cost carriers in the market, bringing much-needed competition to the benefit of all stakeholders.
Lastly, the third pillar is improving existing infrastructure, and $2bn has been invested to renew existing airports, construct new facilities and acquire modern air control technology to cater to rising demand. Local air transport has increased by around 36% since 2015. In March 2017 the Córdoba International Airport reached record-high passenger figures.
How is the MoT planning to develop logistics?
DIETRICH: The government’s plan for transport comprises four segments: infrastructure development, the aeroplane revolution, improving public transport and lowering logistics costs. Logistics has ramifications in road, rail and air transport. The country ships 18.5m tonnes of cargo per year, but aims to increase this to 60m-100m tonnes by the late 2020s, changing the mode of transport where needed.
Air cargo has significant room for expansion. We are not only opening doors for more companies to operate domestically, but also facilitating greater cargo space due to the higher frequency of regular flights.
What plans exist for the implementation of public-private partnership (PPP) projects?
DIETRICH: During the 2016-17 period we carried out the largest infrastructure investment plan in Argentina’s history. In 2018 we are implementing a PPP financing scheme to redefine the way in which infrastructure is built, as it cannot rely on public spending alone. The need for investment will continue in coming years, which will affect most, if not all, major economic sectors. We need private players to intervene, take risks and become key actors in the future of our country.
There are six key road infrastructure projects being publicly tendered in 2018, among a total of 12 projects, which should generate investment of up to $20bn. The immediate impact on transport players is obvious in terms of time and cost savings, but the long-term benefits to competitiveness are too large to estimate.