Argentina moves to nationalize railways

ARGENTINA launched the nationalization of its railroads Monday, taking over three key lines and canceling without compensation all contracts with the companies involved.

After President Cristina Kirchner unveiled plans Sunday to “recover” the country’s railroads from private management, the government published a notice in its Official Bulletin announcing the first takeovers and scrapping the relevant contracts.

“The state isn’t going to pay private companies anymore,” Transport Minister Florencio Randazzo told Radio la Red.

“The state is in a position to be more efficient than the private sector because it has demonstrated this. We are absolutely not going to compensate anyone because no compensation is due.”

Randazzo is one of a crowded field of candidates vying to succeed Kirchner in an October 25 election. He has made nationalizing the railroads a central issue in his campaign.

Kirchner and her late husband Nestor, her predecessor, have steadily renationalized many of the sectors that Argentina privatized in the 1990s, including water, electricity, gas, the national airline and oil firm YPF.

The government had already partly resumed control of the railroads.

The transport ministry said the state rail firm was taking over operations on the four commuter lines connecting the capital Buenos Aires to the surrounding province, one of which had already been nationalized after an accident in 2012 that killed 51 people.

The ministry said the state takeover of the Sarmiento line after the accident had led to a “notable improvement in the quality of service” and demonstrated that “the state can manage efficiently.”

The four lines carry around 22 million passengers a month.

Argentina’s railways have been on a see-saw of nationalizations and privatizations over the years.

They were nationalized in 1948 by populist president Juan Peron before being sold off in the 1990s by president Carlos Menem during a wave of privatizations.

Under private management, services have been drastically cut, with numerous rail lines closed.