Argentina Freight Transport Report Q4 2009

In May there were reports that Argentina's imports of liquid natural gas (LNG) were set to rise as the country sought to avoid the winter shortages it had experienced over the preceding five years. US company Excelerate was contracted to send a floating LNG regasification terminal, which arrived in the southern port city of Bah?-a Blanca at the beginning of the month. Acting on behalf of the government, oil company Repsol-YPF hired the terminal - known as Energy Bridge Regasification Vessel Excelsior - as well as buying a cargo of 80mn cubic metres (cu m) of LNG from Trinidad and Tobago, which was due to be processed. The gas was due to be pumped directly into the national gas pipeline network at Bah?-a Blanca, at a rate of 400,000mn cubic feet (cu ft) a day.

For the 2009-2013 period we are now expecting average annual freight growth across all transport modes, measured in million tonnes per km, of only 0.7%. Various factors support this core prediction. Across our 2009-2013 forecast period, we have reduced the average annual GDP growth forecast to only 0.6%, a pretty dismal performance when compared with the 8.5% annual average registered in the preceding fiveyear period. The government of President Cristina Fern??ndez de Kirchner will find it more difficult to keep the growth rates up in a less supportive international economic climate, and the transport sector will remain constrained by patchy infrastructure. On the plus side, the freight industry is now experiencing more manageable fuel prices, but this contribution to the bottom line will not be enough to dispel the gloom caused by slumping demand.

Road haulage will continue to be the dominant freight transport mode. Investment is still needed in both the highways network and truck fleets, but the recession will ease bottlenecks. Over the forecast period annual average growth in road freight carried will be 0.7%, down sharply from the preceding five years.

BMI now forecasts 0.9% annual growth in rail freight over the next five years, with some new investments still expected to go ahead. We are forecasting maritime traffic to grow by an annual average of 0.5% with lower grains exports this year playing a part.

We have awarded Argentina a freight transport rating of 53.3 (out of a theoretical maximum of 100.0), which places it in the medium range of key Latin American markets that BMI monitors. Positive factors contributing to the country's score include the country's long-term economic and political risk assessments and potential for growth in infrastructure. The total value of transport and communications GDP will rise to US$44bn in nominal terms by 2013, representing 9.9% of Argentina's GDP. The transport and communications sector employed around 666,000 people, or 7.1% of the labour force, in 2008. We see the figure rising to 701,000 by 2013, although as a proportion of the labour force it will remain unchanged at 7.1%.