Argentine railroads lose US$3.5 million every day, and are slower than they were 30 years ago
President Alberto Fernández announced that the State-owned companies would have an increasing weight in the fiscal priorities for 2023, above the most urgent needs such as education, health, or the dramatic effects of inflation.
The Government officially reestablished the passenger railroad route connecting the City of Buenos Aires with the City of Palmira, 25 kilometers from downtown Mendoza.
The decision involves a great financial cost that will have to be sustained by the bulk of society within the framework of a particularly delicate economic situation.
The specific benefits of a limited geographical area will have to be borne by the taxpayers as a whole.
The new passenger train promises a delay of between 26 and 28 hours to cover a distance of 1,000 kilometers, which implies a very unconventional, exhausting, and extremely uncomfortable trip for users.
The same trip on the same reestablished route and for the same number of kilometers reached a maximum duration of up to 20 hours around the time of its closure in 1993, so the current State trains are slower than 30 years ago.
The quality of services leaves much to be desired and jeopardizes the viability of Kirchner’s project, but undoubtedly the greatest cost to be paid is the monetary losses.
Only Operadora Ferroviaria Sociedad del Estado (the most important railway company in the country) presented a deficit budget with a red of $265.83 billion (US$1.3 billion) for 2023.
Argentina’s largest state-owned railway company will cost society the equivalent of US$3.5 million every day only if the budget goal set for the year is successfully met.
Ferrocarriles Argentinos Sociedad del Estado (FASE), the holding company that centralizes all operations since the comprehensive nationalization of the system in 2015, promises to lead the consolidated deficit of public companies this year.
The 2023 Budget presented by Sergio Massa projects a total red of at least 0.24% of GDP for all trains, an item only surpassed by the programmed deficit of ENARSA (the state-owned energy importing company).
Amid an economic and social crisis, the national government will spend the equivalent of the entire Alimentar Program (0.3% of GDP according to the 2023 Budget) on maintaining the operating deficit of state trains to maintain uncompetitive services.
Likewise, the State trains consume the equivalent of half of all the resources allocated to pay for the Universal Child Allowance (AUH, for its acronym in Spanish).
It should be noted that preliminary measurements of the poverty rate suggest that it would have reached and exceeded 42% by the rolling semester ending in February 2023.
Railway branches for long-distance passenger trips in regions with low population density are simply uneconomical projects which would not have much support in the private sector.
The development of this type of service cannot be profitable, so the State will always have to assume a subsidiary position that, ultimately, is transferred to the pocket of the bulk of society to the detriment of other much more important priorities.
With information from Derecha Diario
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