March 9, 2017 / 9:47 PM / a year ago

Japan's trading companies eye Argentina rail contracts

BUENOS AIRES/SANTIAGO, March 9 (Reuters) - At least three Japanese trading companies are evaluating bids on upcoming rail contracts in Argentina, part of a major infrastructure boost planned by President Mauricio Macri this year, Japan’s ambassador said.

The companies, including Marubeni Corp, Mitsubishi Corp and Mitsui & Co Ltd, are particularly interested in sales of passenger rail cars in the Buenos Aires metropolitan area, and could submit bids as a consortium, said Noriteru Fukushima, Japan’s ambassador in Argentina.

Argentina’s government is boosting infrastructure spending in order to make up for decades of underinvestment, create jobs and spur growth ahead of legislative elections in October.

It has announced $14 billion in improvements to the Buenos Aires metropolitan rail system, as well as the $16 billion ‘Plan Belgrano’ collection of road, rail and airport projects to improve freight and passenger connections between Argentina’s poor, remote northern provinces and eastern ports.

Fukushima said the companies had not made any concrete decisions on bidding, as in many cases the tenders for the projects had not yet been published. He expects strong competition from firms from China and elsewhere.

A Marubeni spokesman said in an email on Thursday that the company is “aware of this project and seeking further information at this stage.” Last year, Marubeni won a contract to provide Automatic Train Stop technology to Buenos Aires rail.

A Mitsui spokesman said the company was not involved in Plan Belgrano and otherwise declined to comment, while Mitsubishi representatives in Japan and Argentina did not respond to requests for comment.

Fukushima said company representatives had visited Argentina and met with authorities to learn about the projects. The companies are also interested in road projects, he said.

“Every month, various people come,” Fukushima said in a Wednesday interview.

Other Japanese companies are also interested in bidding on $1.6 billion in improvements to a freight rail line connecting the Mendoza wine region and the grains belt to eastern ports, said a source familiar with the companies’ thinking.

The interest comes amid warming bilateral ties. Prime Minister Shinzo Abe became the first Japanese prime minister in decades to visit Argentina when he met with Macri in November, and Macri plans to visit Japan in May.

Japanese companies have announced $1.3 billion in investments in Argentina since Macri took office in late 2015, Fukushima said in a presentation this week. Overall, foreign companies have announced investment plans worth about $33 billion in Argentina under Macri. (Writing by Luc Cohen; Editing by Caroline Stauffer and Jonathan Oatis)

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