ARGENTINA - RAILWAY TRANSPORTATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67-00059A000500050010-0
• Release Decision: RIFPUB
• Original Classification: R
• Document Page Count: 5
• Document Creation Date: December 12, 2016
• Document Release Date: September 25, 2001
• Sequence Number: 10
• Content Type: REPORT

Approved For Release 2001/11/01 : CIA-RDP67-00059A000500050010-0
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L.;TRICTED
111.70 'XL%
resent ergentere pe lee on t1iiay trureeortation refleete
ecetomie: ane pcittia.1 pioopL .f the eationaliet
government, The eleerument bee speeefieeliy streeesd tee
punlic eereice aspect of rail trureportanion as contraeeed
with the proflteeanking incentive. A hife government official
recently described the transportstior syotem, with particular
reference to railnaeo, as the key to Argentine production,
Loan? to reighborine countries for the construction of rail-
road lines, and cooperation with Brazil in the construction of
ar internntional bridge demonstrate that it is a featere of
Argentine policy to improve rail conneetions with it neiehbors-
The current Five-Yeur Plan provides for the intensificetion of
government controls over the nation economy, including a cone
plate reorganization of the transportation system and an inten-
sive technical eduentional program.
Basic railroad policy in Argentina is strongly influeneed by
the trend toward state ovnership of the various terns of trans-
portation. In its initial steges? this trend concentrated on
lines in the less developed areas of the eeurtry. It later in-
cluded the Argentine State Railways Fyston (Administreelon de
Ferrecarrilee del Estndo), and by 1946, leed encompassed nearly
one-third of the tetel rail mileage.
After protracted negotiations eith the Goverment of Argentina,
British tnterests controlling nearly tro-thirds of all mileage
recently agreed to eell their holdines to the Argentine Govern-
ment. Other lines owned by French capital, constituting nearly
10 per cent or the total, have likewise been acquired by the
Argentine Government. It appears that formal ratification of.
these transactions by the stockholders will be forthcomine.
Under a Government decree of 15 July 1947, a new f7ecretariat
was created responsible to the President, known a: the National
economic Council (N-M). Its function is to coordinate the en-
tire Argentine econome. Integration of transportation is ac-
cordingly a part of ITECIs responsibility.
Both economic and military considerations have influenced Argen-
tine rail policy. Railroads have opened up the Nnterior for
shipment of agricultural and pastoral products. Foreign capital
was primarily attracted by the economic opportunities of rail
development, On the other hand, stratelic considerations have
prompted the construction of some lines having no economic jus-
tification, The present nationalistic government appears to be
particularly atare of the stretoeic aspects of proposed railway
construction. For example, strategic and military considera-
tions were undoubtedly responsible for the drive to complete the
/80 km. Pedro Vargas tiarlargue line to the Andean elope to
transport livestock, oils, precious metals, Mendoza coal, copper,
lead and vanadium. That the line runs through a military outpost
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RESTR I CTED
ARGENTINA RAILrAY TROSFORTATION (A..3 CONT' D)
and near the Nihuil hydroelectric damsite may have strategic
importance. In the race against Brazil to the southeastern
Bolivian oil fields, Argentina installed rail connections from
Yacuiba through Villa Mentes to Pante Cruz. '
4. To attract foreign capital, largely British and French, former
Argentine Governments guaranteed a return of 7 per cent on rail.-
way investments. It was also necessary to offer inducements in
the form of land grants and cash subsidies, As a result, in the
eighty years-from 1857 to 1937 about 11,500,000,000 of British
capital was invested, With additional large sums from a few
French operators.
Under the provisions of the Mitre Law passed in 1907, railways
have been exempt from custom duties onmaterials imported for
use of the lines, as well as from national and provincial taxa-
tion. In return for such exemptions, the lines have been obli-
gated to pay the government 3 per dent of net receipts, such
payments being applied to improvements of highways and bridges.
A further major form of indirect subsidy was the guarantee that
additional concessions would not be granted to other interests
within certain areas during the life of an agreement.
The provinces on authority from the national government, have
been empowered to grant concessions to railway interests, in -
order to further the development of the areas under their juris-
diction.
It is probable that the character of subsidies will change after
the completion of the nationalization program. Deficit appro-
priations, as required, are expected to be adopted.
The current Five-Year Plan includes an appropriation for -
800,000,000 pesos covering the purchase of equipment and rolling
stock, and the improvement of rail connections with Chile,
Brazil and Bolivia. The plan, however, does not provide for
extensive construction of new lines.
5. Railway policy in Argentina has been strongly influenced by:
(1) vested interests, largely British and French capital; (2)
economic requirements, such as the progr.m to develop the in-
terior; and (3) geographic factors (Argentina, unlike Brazil or
the US, has no extensive river system, and has had to develop
rail and highway facilities to serve adequately the great pampas
regions).
The nationalist complexion of the present government wilkun-
doubtedly result in careful examination of all future plans for
railway construction to ensure the protection of strategic and
political national interests.
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pGENTINA RAIINAY TR....NSPORTATION (B-3)
B. OpGANIZATION
1. Ministry of Public 7orks:
Director General of Railroads
2. The Ministry of Public rorks is responsible for railway trans-
.)" portation policy. The Director General of Railroads implements
laws pertaining to railroads. lie inspects railroads and super-
vises railway operation and construction. He initiates projects
for eitension of existing lines and the construction of new
lines. He approves operating schedules, and collects, compiles
and publishes statistics. The Office of the Director General
is sUbdivided into sections responsible for:
Administration
Construction
? Tariffs and Statistics
The Director General has a staff Of railway inspectors.
3. Rail policy is integrated with policy on all forms of trans-
portation at the level of the National Economic Council.
4. It is reported that a new transportation law is under considera-
tion which may carry far-reaching changes in the organization of
transportation responsibility.'
5. Argentine railroads have been generally credited with a higher
level of operating efficiency than any other South American
system. This has been primarily due to the predominant British
control. The US-trained Director General of Railroads is con-
sidered capable, however, and the impending elimination of
British control may not be greatly detrimental to efficiency.
On the other hand, governmental reorganization measures will
introduce new control personnel, and may adversely affect opera-
tional standards.
C. ADMINISTRLTION
I. New railroad lines are proposed by the Director General of
Railroads, who submits his documentated recommendations to the
Congress. Any subsequent construction is under his supervisien.
2. The Director General determines rates. Changes in current
rates are expected, in view or the recent purchase of all lines
by the state. The 1944 railroad rates are currently applicable.
3. 'nth the assumption of state control of all railroad operations,
competition will now be confined to quality of service rendered.
Uniform rates will be applicable to all the lines, including
those still temporarily under British operation.
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4. Inspection and safety of equipment is a responsibility of the
Director General of Railroads. Pertinent regulations were
first approved in 1894 and modified as occasion demanded. The
enforcement of these safety and inspection regulations is
carried out by the staff of inspectors responsible to the Di-
rector General of Railroads. Regulations governing the safety
of the operating personnel are determined by the Secretary of
Labor and Social 7el4'tare and enforced by that office.
5. The training of operating engineers is under the Director
General of Railroads, whose office issues licenses required
for operating locomotives. The training of other operating
and shop personnel has been left to the individual lines.
However, the Five4ear.Plan provides an intensive technical
education program for all media of transport.
6. International rail traffic is covered by agreemente with
neighboring countries which permit through passenger and
freight traffic and the interchange of rolling stock (except
locomotives). The country of destination picks up passenger
and freight cars with its own motive power at frontier sta-
tions. There appear to be no international agreements on
traffic or equipment pools, joint facilities, rates or routes.
7. The Director General of Railroads requires daily and compre-
hensive.monthly reports covering traffic, operating costs and
revenues, rates and other operating data. Reports concerning
accidents and conditions of employment are routed to the Secre-
tary for Labor and Social 741fare. Such re-Ports have a bearing
on government consideration of wages, personnel insurance and
social security matters.
'iR ICm
Approved For Release 2001/11/01 : CIA-RDro/-00059A000500050010-0