Paraná-Paraguay Waterway rival bidder offers to operate at rate 17% below tender floor

At an advanced stage of the tender for dredging and buoyage works on Argentina’s Trunk Waterway, DEME, the company competing against already pre-awarded bidder Jan De Nul, has not given up.

In a letter to Economy Minister Luis Caputo signed by Steven Bouckaert, general manager and representative of DEME NV, the company emphasized the “relevance of its offer,” which it said was “backed by the United States” and submitted in the tender process for the concession of the Paraná-Paraguay Waterway/Trunk Waterway.

“The purpose of any public tender is to obtain the most convenient offer, including the most competitive prices for a country’s economy. Unfortunately, the rules of the VNT tender did not allow us to submit our most competitive rate because of the imposed tariff floor. We note that this tariff floor is significantly higher than the rate DEME had offered in the canceled 2025 tender, even though that tender included a broader scope of services than the current one, such as monitoring systems, among others,” the letter to the Economy Ministry said.

DEME added further arguments. “We believe this tariff floor artificially and unnecessarily increases operating costs for Argentine and U.S. users of the VNT, as well as for Argentina’s strategic agro-export complex,” the company said. It added that “there is no justification for overcharging Argentina’s economy and population by allowing private companies to obtain profit margins above those aligned with market conditions.”

The company proposed “a new tender under economic conditions more favorable to Argentina’s public interest than those provided for in the current VNT tender.” It said the proposal would include “a 17.4% discount compared with the tariff floor imposed under the current VNT tender conditions, while fully complying with all required activities.” As a result, DEME proposed a maximum rate of US$4.77/NRT and the elimination of the imposed US$5.78/NRT tariff floor.

The company estimated that this could generate “nominal savings of at least US$2.5 billion for VNT users over the 25-year concession period.” It added that, according to recent comments by Anpyn Executive Director Iñaki Arreseygor, the ongoing tender would already imply a 15% reduction from current rates. “Our additional 17.4% tariff reduction would mean that dredging and buoyage works on the VNT would cost Argentina’s economy approximately 30% less than under the current situation,” the company said.

The letter also said that, if the minimum price is maintained, “VNT users would be paying 21% above the fair market price for dredging and buoyage services.”

DEME therefore proposed “a new project that would offer more favorable economic conditions than those included in the tender currently under way.” The company said it is in the final stages of preparing a private initiative under Law No. 27,742 and Annex III of Decree No. 713/2024, including the relevant information to demonstrate the technical and economic feasibility of the terms described.

The U.S. factor

Part of DEME’s strategy is to argue that it has U.S. backing to take over the works required on the waterway for 25 years, with an option for five more. The letter is also signed by U.S.-based executives, including Chris Gunsten, vice president of Great Lakes Dredge & Dock Company, one of the largest dredging companies in the United States; John D’Agostini of Clear Street; and Neil Brown of KKR.

Although these companies did not take part in the tender alongside DEME, unlike Jan De Nul, which teamed up with Argentine company Servimagnus, there has been a strong campaign claiming a commitment to provide financial and operational support to DEME.

The letter argues that “this project is of great importance for Argentina’s competitiveness and investment climate, as well as for the commercial and strategic interests of the United States. A successful award to leading U.S.-based investors would provide strong market validation of President Milei’s reform program and further strengthen the bilateral relationship,” the companies said. The letter also refers to direct support from Donald Trump’s government for the offer.

Source: La Nación

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