MercoPress. South Atlantic News Agency

Argentina freezes all activities in shared channel which is crucial for Uruguayan export trade

Minister Timerman giving time for Uruguay to clear “procedural irregularities” in dredging contract

Argentina decided to suspend all activities related to the River Plate Martin Garcia access channel until the Uruguayan government is “fully satisfied” about the alleged “procedural irregularities” pointed out by Uruguay’s government audit tribunal.

The Martin Garcia channel is one of two giving access to the treacherous River Plate. The other one, Mitre leads directly to the port of Buenos Aires while Martin Garcia follows closer to the Uruguayan coast and then up the Parana. The two are managed by a joint Argentine-Uruguayan committee, CARP, (Managing Committee of the River Plate) and decisions are taken with both sides agreeing at foreign ministry level.

However the powerful lobby from the port of Buenos Aires always makes sure that the Mitre channel is deeper and well dredged, while Mitre that now serves Uruguay’s main grains, oilseeds and pulp port at Nueva Palmira is treated second class, given its competitor potential.

Uruguay is always propping Argentina to give similar maintenance to the Martin Garcia channel which also serves the Parana and Uruguay rivers, but the government of Cristina Fernandez is playing hard ball and always imposes new conditions.

The latest incident erupts from Uruguay’s Audit tribunal, which checks on all government expenditures, tenders and outlays and in a report questions the tender procedure process for extending the current dredging company a new contract to keep working in the Martin Garcia channel.

According to the report, non released info ratifies “doubts about the tender procedure” for the contract and advises the Uruguayan government to take the necessary legal measures for such cases.

At the time of the renewal of the contract of dredgers Riovía, it was reported by Uruguayan diplomats that they had been approached to help the Dutch-Argentine company involved, which has been working for years in the River Plate, to obtain the extension and continue with the job.

A Uruguayan ambassador at large resigned and the Uruguayan ambassador in Argentina Francisco Bustillo reported the incident to the government and to a parliamentary investigation committee.

However a few days later the Uruguayan Foreign minister Luis Almagro, as stated in the current Argentine Foreign ministry release, went before Parliament and said that as has been cleared by Ambassador Bustillo, “there is nothing leading to file a complaint or involving any delinquency activities, not even at an attempt level, from the Argentine officials involved in the negotiations of the tender”.

But as time fled with the exchange of communiqués from both sides and the Argentine side of CARP dragged its feet, a moment came when there was no other exit but to automatically renew Riovías contract in their terms since dredging had to continue.

End of the picture, Riovía with or without the help from Argentine delegates got what it wanted and with improved financial conditions; Uruguay apparently had to back step and the delay to have Martin Garcia properly dredged so vessels can leave full loaded remains frozen, while the Argentine Foreign ministry calls for a pause apparently ‘offended’ by the allegations from Uruguay’s Audit Office that there were serious procedural irregularities in the contract.

In another release the Argentine Foreign ministry recalls that it was Minister Hector Timerman who proposed as condition to continue with deeper dredging and maintenance of the Martin Garcia channel that both countries jointly audit the extension of the Riovías contract.

“It’s really surprising that the Uruguayan auditors, as expressed by the media, should refer to doubts about the procedure when clearing all doubts was the reason for calling them to investigate”, reads the Argentine communiqué, adding that if there are doubts, the sooner they are revealed the better, “unless all this is part of an interested ploy to avoid the fraternal dialogue which Argentina wishes to build with Uruguay and its people”.

Argentina also points out that contrary to what Uruguayan politicians like to say, the Martin Garcia channel is mostly used by vessels with final destination in Argentine ports, and therefore “Argentina will benefit most from dredging a deeper and better maintained canal”