By Maximilian Heath
BUENOS AIRES - Argentina's government has agreed a short-term deal with Belgian firm Jan de Nul to dredge the Parana River, a government source said on Friday, a move aimed at helping ships with grain exports navigate the waterway which currently is at record low levels.
The Parana is at its lowest in 77 years due to a severe drought in Brazil where it begins. This has hit shipments while the state has a plan to take a more direct role managing the river, feeding industry worries about possible tariff increases.
Argentina is a key global wheat supplier, the world's No.2 corn exporter and top exporter of soy oil and meal, used to fatten hogs and poultry from Europe to Southeast Asia. Some 80% of farm exports travel along the Parana to the ocean.
The Parana has been managed for decades by Jan de Nul, but the government this year handed management to the National Ports Administration (NPA), which plans a new tender.
"Regarding the dredging, a short-term contract will be made for Jan de Nul to continue for a while, as the tender will be launched at the same time," the government source said. "It is already agreed that it will continue with Jan de Nul."
A spokesman for Jan de Nul declined to comment.
Argentina needs the Parana to be more navigable for moving grains, the main source of export dollars needed to replenish central bank reserves strained by a long economic recession and the coronavirus pandemic.
"It is imperative that the State, through the NPA, offer guarantees to maintain the dredging and beaconing," said Gustavo Idigoras, who heads the chamber that represents grain exporters and processors in Argentina.
He added he was also worried about potential fee increases.
The Parana has made Argentina one of the world's most efficient food exporters. Cargo ships loaded directly at Rosario avoid using barges and trucking that bog down shipping in Brazil and the United States.
"To hire Jan de Nul in this context is logical," said a source at the Chamber of Private Commercial Ports. "There is no space to innovate. But the optimal thing is that the 'long' tender be done as soon as possible".
(Reporting by Maximilian Heath; Editing by Adam Jourdan and David Gregorio)