RAIL privatisation in Argentina is now entering a defined phase. While the privatisation of state-owned business is well established as a core policy of the administration of president, Javier Milei, recent developments provide greater clarity on how this will be achieved for Belgrano Freight and Logistics, where investment may come from, and why rail freight is being positioned at the centre of the country’s economic strategy.
Rather than focusing solely on cost reduction, the government is explicitly linking rail development to export growth, industrial expansion and regional connectivity. Economy minister, Luis Caputo, has framed the challenge in direct terms, stating that “Argentina has to lower logistics costs to be competitive again,” and underlining the importance of rail in supporting agriculture and mining exports.
Argentina’s rail network has a legacy of repeated structural change. The former Argentinian Railways (FA) was privatised in the 1990s, before large sections of the freight network were renationalised in the 2000s and early 2010s following declining service quality and insufficient investment by the private sector. This legacy continues to shape investor confidence today. While the Milei administration has signalled a strong commitment to market-led reform, concerns remain around long-term policy stability, regulatory clarity and macroeconomic conditions. These factors are central to investor decision-making as Argentina seeks to reintroduce private participation at scale, and have been reflected in a subdued investor response.
Rail freight has emerged as the clear priority within the privatisation programme, supported by targeted public investment over the past decade that has begun to stabilise operation of the 9500km Belgrano network. Branded as Argentinian Trains Freight (TAC), this brings together the 1000mm-gauge Belgrano, 1435mm-gauge Urquiza and 1676mm-gauge San Martín networks, linking Buenos Aires with northern and western regions of the country and serving the borders with Uruguay, Brazil, Paraguay and Chile.
Key initiatives have included infrastructure renewals, upgrading key grain corridors, and acquiring new locomotives and wagons largely with Chinese finance. These improvements have increased capacity and reliability on core freight routes, particularly those serving northern agricultural regions. Rail freight plays a central role in Argentina’s export economy, supporting the agriculture, mining and energy sectors that account for the majority of export revenue. Agriculture alone represents around 60% of Argentina’s export income, making inland logistics a critical factor in global competitiveness.
Rail currently has a 5% share of the domestic freight market, placing Argentina significantly below other countries where rail development has been more sustained. The Inter-American Development Bank (IDB) estimates that rail can reduce transport costs by 30-50% per tonne-km compared with road, particularly over long distances, highlighting the scale of opportunity for modal shift if network performance continues to improve. Gustavo Idígoras, president of grain export chamber Ciara-CEC, complains that currently it costs more to transport a tonne of freight from the northern province of Salta to the port of Rosario than to ship it from Rosario to Vietnam.
Resource development
The strategic importance of rail is particularly evident in northwest Argentina, including the province of Salta and the wider Lithium Triangle that also covers neighbouring Chile and Bolivia. Mining developments in this region are located in remote, high-altitude areas with limited road infrastructure. Rail therefore offers the only scalable solution for transporting both bulk exports and inbound supplies such as construction materials, fuel and heavy equipment.
While current policy and investor focus is centred on agriculture and mining, the potential role of rail in supporting Argentina’s energy sector is also emerging as a longer-term consideration. The development of Vaca Muerta, one of the world’s largest shale oil and gas reserves and located in west-central Argentina, requires substantial inbound shipments, particularly of sand and equipment for fracking, alongside outbound movements of hydrocarbons. At present, much of this supply chain is road-based or pipeline-dependent, but experience elsewhere, particularly in the United States, suggests rail can play a complementary role in improving efficiency and reducing costs. While not yet a central element of the privatisation programme, the scale of Vaca Muerta indicates a potential future source of freight demand as Argentina’s rail network evolves.
A defining feature of Argentina’s privatisation approach is the proposed introduction of an open access model for rail freight, under which infrastructure remains state-owned while private operators pay for network access. While infrastructure remained in public ownership under the concession model introduced for rail privatisation in the 1990s, the concessions were vertically integrated, granting single operators exclusive rights to operate and manage defined parts of the network. The new approach represents a shift towards separating infrastructure from operations, with the objective of increasing competition, improving service quality and lowering costs while maintaining state control over the network.
Grupo México indicated earlier this year it could invest up to $US 3bn and play a significant role in the Argentine rail freight sector.
The shift to this new model is reflected by the short-term extensions granted to most of the remaining privately-held freight concessions, with only Ferrocarril Central Argentino (FCA) securing a long-term extension beyond the end of this year, ensuring continuity on key routes. The Ferrosur Roca concession has been extended to September to avoid disruption to industrial and agricultural supply chains, and the Ferroexpreso Pampeano (Fepsa) concession, already extended in part to allow completion of emergency flood repairs to lines serving the port of Bahía Blanca, has been temporarily extended again until a new competitive tender is launched for the operation of the line. Fepsa and Ferrosur Roca have been invited to negotiate longer-term arrangements aligned with the new system.
Since announcing its rail privatisation programme in 2025, the government has provided clearer signals on the likely sources of investment, pointing to a diversified mix of international and domestic capital. A key platform for market engagement was provided by Argentina Week 2026 held in New York in March. This investor roadshow was organised by the Argentinian government to promote opportunities across a variety of sectors, with a strong focus on the rail industry. Meetings held during the event and in follow-up sessions indicate a primary focus on investors from the United States and Mexico, alongside domestic industrial groups.
The Government successfully triggered interest from Grupo México, which through its rail division Grupo México Transport (GMXT) owns Ferromex, Mexico’s largest rail freight concession, as well as its third-largest, Ferrosur.
Grupo México indicated earlier this year it could invest up to $US 3bn and play a significant role in the Argentine rail freight sector. However, in May the company appeared to reverse course, expressing concerns over the proposed concession structure and what it viewed as preferential treatment of Argentinean bidders, and removing itself from the bidding process. Yet a few weeks later, in a surprise development, Grupo México announced it was teaming up with US rail equipment giant Wabtec as a serious bidder, in time for the scheduled release of tender documents last month.
The GMXT-Wabtec alliance faces heavy domestic competition from a powerful consortium of major agricultural exporters that form the rail sector’s largest customers. Major commodity trading houses Bunge, Cargill, Louis Dreyfus, ACA and AGD have a strong commercial incentive to improve rail logistics. They have been repeatedly identified by local and trade media as potential participants in the privatisation process, joining forces to form a consortium to further their interests as investors, strategic partners or anchor customers. Further competition could also come from Argentina’s mining sector with companies such as Rio Tinto and others focusing on lithium extraction engaging with government officials, reflecting the critical importance of rail infrastructure to unlocking production in the northern provinces.
Minister of deregulation and state transformation, Federico Sturzenegger, has emphasised the importance of aligning infrastructure with market demand, noting that “those who generate economic activity should be the ones driving investment,” a principle reflected in the government’s engagement with major freight shippers. This approach underpins the restructuring of Belgrano Freight and Logistics, where rolling stock and operations are expected to be separated and offered for sale separately in order to facilitate wider private-sector participation.
China’s role, while less visible in the privatisation process itself, remains due to its financing of recent line upgrades. However, there is no clear indication at this stage that Chinese state entities will directly participate in upcoming tenders.
The next phase of rail reform is expected to centre on the sale of assets currently belonging to Belgrano Freight and Logistics. This will provide the first clear test of investor appetite and determine whether early engagement from potential investors translates into binding commitments. At the same time, the government is finalising the regulatory framework for open-access operations, including access pricing, network capacity allocation and operational responsibilities.
Securing long-term contracts to move freight for major agricultural exporters and mining companies is expected to be central to the process, providing revenue certainty and underpinning investment cases. Implementation is likely to proceed in phases, beginning with high-volume corridors linked to export markets, before expanding further across the network.
Commuter focus in passenger sector
WHILE rail privatisation is currently focusing on freight, the Milei administration also has the Buenos Aires commuter network in its sights, but is proceeding at a more cautious pace.
In April the government formally requested technical assistance from the Inter-American Development Bank (IDB) to support the next phase of restructuring, focusing on developing a concession framework for commuter services. This will include contract design, regulatory structures and risk allocation, mirroring in part the separation of infrastructure from operations that is being applied in the freight sector.
The commuter network serving the Buenos Aires metropolitan area (AMBA) comprises seven distinct operations, known as the Mitre, Sarmiento, Roca, San Martín, Belgrano North, Belgrano South and Urquiza lines, covering approximately 900km and carrying over 1 million passengers per day. With the exception of the Belgrano North and Urquiza lines, respectively operated by private concessionaires Ferrovías and Metrovías under contracts extended until June 30 2027, commuter services are provided by the state-owned Argentinian Trains Operations, using a mixed fleet of EMUs, DMUs, and coaches hauled by diesel locomotives.
In contrast with the freight sector, where investment cases are underpinned by export-driven demand, commuter services remain heavily subsidised and operationally complex. This has contributed to their relative low priority within the broader reform programme to date. The decision to engage the IDB signals a shift to preparatory execution, however.
Under the proposed model, infrastructure, rolling stock and operations would be unbundled, with private operators awarded concessions to run services under continued state supervision. The structure aligns with the wider reform agenda, which emphasises competition and private-sector participation while retaining public control of core assets. Officials have stated that the objective is to develop a system that is “sustainable and attractive for private investment,” while maintaining service continuity across the network.
Preparatory work is now underway, with technical studies expected to define concession packaging, sequencing and risk-sharing mechanisms. Initial tenders are expected to be launched towards the end of this year, although timelines remain dependent on regulatory approvals and market appetite.
