Argentine high-speed struggles against mounting opposition

International Railway Journal, Oct, 2008

MORE than a million Argentines have signed an internet petition opposing the construction of South America's first high-speed line. Under Argentine law, citizens can propose laws to the Senate if the total number of signatures exceeds 1.5% of the voting population.

The petition's author says the Senate should consider using the funds to rebuild Argentina's existing 18,000km network, suggesting that revitalising the network could be achieved for $US 3.1 billion less than the cost of the 710km Buenos Aires--Rosario--Cordoba high-speed line.

The government argues that the project will be self-financing, because all of the finance will come from French banks. One of these banks, Natixis, lost $US 2.2 billion in the first half of 2008.

The petition is another blow for the project, which has already been stalled by a doubling of the interest rate Argentina pays for international finance, caused by a dispute between the government and farmers over taxes earlier this year.

The government recently said it would pay its entire $US 6.7 billion debt to the Paris Club nations using existing foreign exchange reserves, which would end its difficulties getting low-cost foreign finance for the high-speed line and other major infrastructure projects.