A US dredging company is challenging the bid terms of President Javier Milei’s flagship concession in Argentina, asserting that they are skewed in favor of a consortium with historical connections to China. Great Lakes Dredge & Dock Co has pledged to assist in deepening the Paraná River, contingent upon its partner, Belgium-based Dredging Environmental & Marine Engineering NV, securing the formal bid submitted in February. DEME is in competition with a consortium headed by Jan de Nul NV, another Belgian firm, which has been engaged in dredging the Paraná River since the 1990s. A victor may be declared in either May or June. The river serves as Argentina’s economic lifeline, facilitating the majority of grain exports that drive the nation’s growth. Enhancing the depth of the shallow river, where vessels have become stranded, stands as a pivotal infrastructure initiative in Milei’s endeavor to transform the crisis-ridden nation into a formidable economic force. Milei’s auction is not accessible to state-run entities, which has contributed to a public perception that the libertarian leader aimed to exclude Chinese companies, reflecting his ties to the administration of US President Donald Trump and its objective of reducing China’s influence in Latin America. Following the US’s provision of a US$20-billion financial lifeline to Milei in October, Treasury Secretary Scott Bessent remarked that Milei was “committed to getting China out” of Argentina, noting that these efforts encompass sea ports. In the context of geopolitics, an auction in Argentina that ostensibly appears to be a contest between two Belgian dredging behemoths is further complicated by the backing of the United States on one side and a legacy of collaboration with China on the opposite side.
According to Argentina’s government, Great Lakes did not submit any formal complaints throughout the extensive hearings regarding the conditions of the concession. China has not provided any commentary regarding the exclusion of state-controlled companies. DEME, nonetheless, voiced its grievances over a year ago regarding the identical terms that it claims disproportionately benefit Jan de Nul. In a statement made in November prior to the release of the latest auction conditions, DEME adopted a more diplomatic stance, referring to Argentina as a strategic market and commending international initiatives aimed at ensuring a transparent process. Great Lakes, headquartered in Houston and recognized as the largest provider of dredging services in the United States, perceives a disparity in the competitive landscape due to contract stipulations that appear to favor Jan de Nul, a longstanding collaborator of Argentina on the Paraná. “With the tender, it’s been geared toward the incumbent,” stated Chris Gunsten during an interview. “It’s the uphill battle of, ‘Is it already cooked?” Has it been completed already? The incumbent will simply benefit from certain technicalities embedded within the tender process. Concurrently, representatives for DEME and Great Lakes assert that Jan de Nul’s bidding collaborator, Servimagnus SA from Argentina, has engaged in projects with China’s state-owned CCCC Shanghai Dredging Co. Officially, there is no indication that any Chinese firm is included in the pending bid. Jan de Nul refrained from providing a comment via a local public relations representative.
In a statement, Servimagnus recognized its previous collaboration with China’s CCCC but asserted, “today we don’t have any commercial or contractual relationship with a Chinese company or the government.” The Argentine firm underscored that it possesses proprietary technology and equipment for its operations. DEME has confirmed that it submitted its bid on February 27, with its consortium comprising Great Lakes and the New York-based financial broker Clear Street Group Inc. Great Lakes remains dedicated to advancing the physical dredging efforts, while discussions regarding an equity stake in the project continue, he stated. Indeed, DEME has previously engaged in projects in China as a component of its international operations. Among the requirements raising concerns for Great Lakes is Argentina’s stipulation of a price floor, a condition Gunsten described as unprecedented. The concession additionally requires a firm that has previously undertaken the dredging of 250 kilometres (156 miles) of river, a notable achievement accomplished by Jan de Nul in the Paraná throughout its 25-year concession period. Any company that contests a requirement is mandated to post an objection bond of US$10 million, which Argentina retains should the authorities dismiss the objection. “Price floor – I’ve never seen it ever, and I’m 34 years in the dredging industry,” stated Gunsten. “The proprietor typically seeks the lowest cost while maintaining an appropriate standard of quality.” DEME and others “dredge millions of cubic metres per year with their equipment,” he added. “Linking the stipulation to an uninterrupted segment of a river is absurd.”
Iñaki Arreseygor stated that authorities received over 200 inquiries from interested parties, and “not one of those” originated from Great Lakes. “It never manifested any interest,” Arreseygor stated in a written response to a request for comment. According to him, DEME had the opportunity to officially include Great Lakes as a partner in its bid but chose not to do so. “We have transparency guarantees and a robust procedure that speaks for itself,” stated Arreseygor. Arreseygor referenced a report from UNCTAD, a United Nations development organization, which advocated for the implementation of a price floor to prevent any instances of price dumping by companies or the exploitation of a dominant market position. “We’re not surprised, unfortunately, by these types of actions that only seek to boycott an unprecedented procedure in the history of this contract,” he stated, referring to Great Lakes. Following the initiation of discussions by Great Lakes last November, DEME obtained letters from the Development Finance Corporation and International Finance Corporation indicating their readiness to offer financing contingent upon the consortium’s success in the tender process. Gunsten and his delegation convened with US Ambassador Peter Lamelas in Buenos Aires last week. Consultants advising DEME indicate that China’s silence regarding the tender is puzzling, particularly given Milei’s actions against state-run firms, which highlights Servimagnus’s previous engagements in Argentina with Shanghai Dredging. “You start seeing it’s almost like a shell game, almost a pyramid situation where they’re hiding the ball from you,” stated Steve Bovo. “The Chinese are engaging in global competition and exhibit no reservations regarding the situation in Argentina, particularly in relation to any potential obstruction of their bidding opportunities.”