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Uruguay export link at risk from Argentina
by Staff Writers
Montevideo, Uruguay (UPI) May 15, 2012

disclaimer: image is for illustration purposes only

Uruguay's river transport export links are being put at risk because of Argentine delays that critics say are mired in corruption and business rivalries.

Uruguay depends on river transport to access export markets but the Latin American country also needs to keep the waterways dredged regularly to make sure vessels pass without hindrance.

In recent months Uruguay's trade is being hampered by delays in the dredging of the Plate River canal waters. The delay prevents ships from loading to capacity for fear of grounding in shallow waters.

At issue is the overdue dredging of the Martina Marcia canal on the Plate. Uruguayan media sources accused a Dutch company responsible for the dredging of being too close to Argentine officials.

The delays were part of a concerted effort by the Dutch operators of the dredging program to maintain pressure on Uruguay and to retain the business, the reports said.

Argentine officials were accused of trying to bribe Uruguayan government officials with a $1 million sweetener. Confronted with the offer, Uruguayan officials reported the incident to their government, causing the affair to come to light, news media reported.

Argentina responded by demanding a joint audit of the River Plate Administrative Commission but Uruguayan officials said the audit would delay further work to clear the canal and obstruct river transport for Uruguay's export trade.

Critics said Argentine authorities appeared not too keen on keeping the river route fully maintained as it posed a commercial threat to rival Argentine facilities on the river.

Uruguay used the Martin Garcia canal for vessels carrying grains, oilseeds, minerals, paper and pulp to its export markets.

The River Plate has two main canals, the Mitre leading directly to Buenos Aires and the Martin Garcia running parallel to the Uruguayan coast line and joining up with the Uruguay River, a major regional transport hub.

Argentine business interests are also worried that Uruguay's port of Nueva Palmira is taking trade away from Buenos Aires.

Uruguayan media reports accused Dutch company RioVia, responsible for the dredging operations, of cozying up to the Argentine side in the hope of retaining control on the river. Uruguay wants to remove RioVia and put the dredging operation to international tender, a move generally opposed in Argentina.

Uruguayan officials say the dredging costs can be cheaper than $12 million paid to RioVia last year. A temporary contract renewal led to RioVia agreeing to do the job in the interim but at a higher fee of $15 million. The company earlier demanded $19 million for its services this year, the reports said.

RioVia wasn't immediately available to comment on the reports.

Uruguayan officials said competitors have offered to carry out the same dredging operation for $9 million.


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