China’s CCCC Bidding on Strategic Paraguay-Parana Waterway Project
On November 18, a Paraguayan official from the Ministry of Public Works confirmed that a subsidiary of China Communication Construction Company (CCCC), Shanghai Dredging Co., is among five companies still under consideration for a bid to expand and manage a 1,238-kilometer (km) section of the 3,300 km Paraguay-Parana waterway, situated in Argentina at the confluence of the Parana and Paraguay rivers and the Rio de la Plata. The waterway is a critical regional trade route, connecting 29 ports in Argentina, Bolivia, Paraguay, Uruguay, and southern Brazil with the Atlantic Ocean. For Argentina alone, the waterway accounts for nearly 75% of foreign trade (consisting primarily of grain and soybeans).
The Argentinian section currently generates a revenue of around $190 million per year through tolls, and this number is expected to increase as the planned expansion will permit more and larger ships to use the waterway. Strategically, China’s interest in the waterway aligns with Beijing’s objective to secure international agricultural supply chains. In April 2020, China surpassed Brazil as Argentina’s largest overall trading partner, with data showing that export of soybeans accounted for 52% of Argentina’s exports to China.
Some local analysts have also expressed concern over expanding Chinese control of the country’s transportation infrastructure, which could provide China undue leverage in negotiating export prices. Meanwhile, environmentalists have urged caution concerning the dredging project’s environmental implications. According to some experts, modification of the riverbed through dredging could harm the biodiversity of the region.
The four other competing bids for the project are primarily European companies that include Jan de Nul (whose current contract to manage the waterway expires in April 2021), Dredging International, Boskalis, and Van Oord. It is estimated that the dredging project will require an investment of $3.8 billion. A final decision on the contractor is expected in 2021.