The arrival of the train to San Luis after 30 years. It was the 12th of July.
Companies operating under the control of the nation state are an important part of the fiscal deficitl that have dragged the public finances for years. Last year, this collection of 34 government-run companies lost about $ 3,800 million, a figure equal to 0.8% of GDP.
Prospects do not seem to improve in 2022. Only in the first quarter of the year was the operating deficit of public companies reached 872 million dollars – calculated at the official average exchange rate for the quarter – against the 675 million recorded in the first quarter of 2021. In other words, in one year the operating deficit grew by almost 40%, in dollars.. Taking into account the year from April 2021 to March 2022, the company deficit exceeds 4.300 million dollars.
How has this operational deficit been corrected? In the first quarter of the year, the companies received transfers of the Treasury for 75,127 million pesos, equivalent to 708 million dollars.
The operating deficit is calculated by comparing the operating income of the company – what it bills for its business – with how much it spends. In most cases – there are exceptions – the balance is negative.
The data is downloaded into spreadsheets periodically prepared by the National Budget Office, a dependency of the Ministry of Economy. It is not included in the list of 34 public companies those in the financial sector, such as Banco Nación or BICE, which, on the other hand, have balance sheets with a positive balance.
How to lower the fiscal deficit
In his first statements as Minister of the Economy, Silvia Batakis mentioned the aspiration of reduce the fiscal deficit. Public companies are unlikely to contribute to this goal. On top of loss-making companies are companies that generate income by applying to the services they provide regulated tariffs that are far from reflecting operational costs. In other words, the deficit reflects the official decision to operate at a loss, covering those losses with contributions from the Treasury.
In 2022 it leads the ranking of the most loss-making companies railroad, which in three months lost 31,767 million pesos, equal to 300 million dollars at the official average exchange rate of 107 dollars. In other words, it meant running passenger and freight trains during the first quarter of the year a loss of $ 3.3 million per day.
The remarkable thing is that in the first quarter of 2021 Trenes Argentinos lost 180 million dollars. A first conclusion: once the pandemic has been overcome and economic activity has returned to normal, trains are losing more than under the effects of the pandemic. It is logical: the more passengers they carry, the more money they lose. This explains why the fare paid by passengers, both on short and long-distance trains, cover only 10% of the operating cost.
In other words: a ticket that allows you to travel from Estación Once to Moreno, one trip from 47 kilometers, costs $ 12.25 if you pay for it with the SUBE card. In addition, the beneficiary of the social rate receives a 50% discount. For the cost of the ticket to cover the costs, it would have to be multiplied by 10. Unimaginable. An increase in urban public transport fares of close to 40% is about to be announced these days.
The railway system operates in a holding company called Sociedad Operadora Ferroviaria Sociedad del Estado (SOFSE). Under this umbrella, Trenes Argentinos operates – which is the system that manages passenger trains in the metropolitan area, regional and long-distance trains -, Trenes Argentinos Cargas; Infrastructure of Argentine trains and human capital of Argentine trains. This group of companies is still the largest employer in the country today. SOFT pays the salary to 30,102 people.
Trains could be said to be at the same time the country’s main employer and the public company with the largest operating deficit.
Another fact: 64% of SOFSE’s operating income, which is what it bills for its services, goes to cover the payment of its employees’ salaries.
welcome to the train
Despite this, the government shows the railway works as a great achievement for everyone. Last week the passenger train service connecting the cities of Rufino (Santa Fe) with Justo Daract, a small town of 10,000 inhabitants located 130 kilometers from the capital San Luis. In a few days you can travel from Retiro to Justo Daract. It will be a single weekly service.
The President Albert Fernandez (two days earlier he was supervising the paving work in Berazategui), Governor Adolfo Rodríguez Saá, Transport Minister Alexis Guerrera and Argentine train chief Martín Marinucci.
It is a stretch, starting from the Retiro, of 669 kilometers and will be covered in 15 hours and 11 minutes. A journey that takes place at an average speed of 44 kilometers per hour. In 2022. The one-way trip will cost from 1 August $ 665 first class, $ 785 coach and $ 2,280 cabin. The same journey, by bus, It takes 11 hours and costs around $ 6,000. It is a service that starts every day at 3pm.
If it’s for connectivity, the bus service, available every day, is much more extensive than the train service, which will travel once a week. At another price, of course.
Clarione He wanted to consult the head of Trenes Argentinos on the train deficit. Marinucci replied with a short text in which he points out that: “The nation state has as its premise the promotion of development and social well-being. In this sense, as a company dependent on the Ministry of Transport, Trenes Argentinos is governed by the same principles. Deficit of expression is still an indeterminate concept. Outside of the number that can be seen isolated in a table of debts and credits, Trenes Argentinos makes a high contribution to national productivity.“
The “indeterminate concept” mentioned by Marinucci referring to the operational deficit of the railways is interesting. It is a concept that is financed with contributions from the Treasury. The Treasury, in turn, uses the money to cover this indeterminate concept with money that comes from the collection or issuance of debts. Either way, of course, with money coming from taxpayers. It is impossible that the trains do not give any losses. But a more realistic pricing policy could help reduce operational reductions to the benefit of tax accounts and, ultimately, citizens.
As mentioned, trains are at the top of the list of loss-making companies. But there is more. Enarsa (formerly IEASA) accumulated in the first quarter a deficit of $ 197 million. In all last year it had a $ 1.057 million red. Easily explained numbers: Enarsa imports energy at the market price and, by political decision, just like the train ticket, sells it to the local system at a lower price. The difference is the subsidies, which seek to be reduced through tariff segmentation.
Aerolineas Argentinas is a special case. It accumulates heavy losses despite offering -fitable- services at market prices. Each year it receives contributions from the Treasury on average close to $ 600 million. It lost $ 835 million last year and has already marked an operating red this year $ 64 million.
Days ago Clarione told the case of Coal deposits of the Rio Turbio. In its business plan for 2022, it plans to invoice only 47 million pesos. But it will have operating expenses of $ 11,882 million. The income covers just 0.4% of the expenses. 89% of expenses go to pay wages.
Public companies in surplus
There are exceptions. Six companies have shown a favorable difference between revenue and expenditure so far in the first quarter of 2022.
INTeA SA (Innovaciones Tecnológicas Agropecuarias SA) is a joint venture consisting mainly of the National Institute of Agricultural Technology (INTA) and the Fundación ArgenINTA. It had an operating surplus of $ 19,000 in the first quarter.
Tandano (ship repair and construction) reached a positive balance of $ 65,000.
the signature VENG SA. (space-oriented technological services and developments) earns $ 591,000.
Nasa nuclear power, which operates nuclear power plants, recorded an operating surplus of $ 9.3 million.
General administration of ports had an operating surplus of $ 27.3 million.
Gustavo Bazzan
Source: Clarin
