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.