Argentina’s Economy Minister confirmed Thursday the tender for privatizing 90% of state-owned water company AySA, continuing Javier Milei’s policy to dismantle public services.

The Argentinean Minister of Economy, Luis Caputo, confirmed on May 14 the upcoming publication of the tender documents for the sale of 90% of the shares in the Water and Sanitation S.A. Company (Agua y Saneamientos Argentinos S.A.-AySA, in Spanish).

After 10 months of initiating the privatization process, the Government of ultraconservative Javier Milei continues its policy of dismantling public services, now with the sale of the company responsible for providing potable water and sewage services in the Buenos Aires Metropolitan Area. The measure will be formally published Friday in the Official Gazette.

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“The incorporation of a strategic operator with technical, financial, and operational capacity will allow for the promotion of new and better investments, the expansion of the network, and the improvement of service quality for millions of Argentines”, Caputo stated.

The remaining 10% of the company will remain in the hands of its employees through the Participatory Property Program, according to the Executive’s declarations. Furthermore, the plan is to sell at least 51% of the shares to a “strategic operator”, with the remainder trading on the Stock Exchange.

Text reads: “Tomorrow, the tender documents of AySA will be published in the Official Gazette to move forward with the sale of 90% of the company’s shares that are now in the hands of the National State. The addition of a strategic operator with technical, financial and operational capacity will allow to boost new and better investments, expand the network and improve the quality of service for millions of Argentines. We continue to move toward a model in which the state stops using public companies as political coffers and instead focuses on ensuring clear rules, promoting competition, and creating conditions for investment and growth. More private investment and better services for Argentines.”

The new concession contract, approved in late April, establishes the provision of the service for a period of 30 years, with the possibility of a 10-year extension. This move marks a significant shift in the country’s economic policy, aligning with Milei’s broader agenda of reducing State intervention and promoting private sector involvement in key public utilities.

A New Re-Privatization

However, historical precedents from Argentina’s privatization process of the 1990s paint a different picture than the promises of improvement Caputo now forecasts.

During the previous privatization of this very company, the concessionaire halted the extension of coverage, effectively delegating the payment for necessary works to users to ensure essential water and sewage services. This conduct breached the contractual commitment to provide universal service.

The re-nationalization of AySA in 2006, by decision of then-President Néstor Kirchner, reversed this stagnation. Under public management, significant progress was achieved in expanding infrastructure and coverage, currently reaching more than 14 million people in the metropolitan area. This tangible historical outcome directly contrasts with the current government’s promises of enhanced service under private operators, raising concerns among various sectors about potential repetitions of past failures and impacts on public access to essential services.

New Extractivist Projects

In a related development, Minister Caputo also announced that “the Evaluation Committee today approved the entry of two mining projects into the Regime of Incentive for Large Investments (RIGI)“, totaling an investment exceeding $2 billion.

These projects include the San Jorge copper project in Mendoza, with an investment of $891 million dollars, and the expansion of the Cauchari Olaroz lithium project in Jujuy, with an investment of $1.241 million. For the “No to the Mine” Assembly of Esquel, the mining scenario in Mendoza (where San Jorge is located) is undergoing a significant shift, driven by the local Government’s newfound pro-mining stance. This shift, they argue, is opening doors for an industry that constantly seeks prosperous ventures in various parts of the world.

These decisions underscore the Milei Government’s broader economic strategy, which involves extensive privatization and the promotion of large-scale extractivist projects.

Text reads: “The Evaluation Committee approved today the entry into Regime of Incentive for Large Investments (RIGI) of two mining projects. The copper project of Minera San Jorge in Mendoza for an investment of $891 million dollars and the expansion of the lithium project of Cauchari Olaroz in Jujuy with an investment of $1,241 million dollars…”

Critics argue that such policies prioritize foreign investment and corporate interests over environmental protection and the well-being of local communities.

The privatization of the Water State-owned Company, coupled with the approval of major mining investments, signals a clear direction in Argentina’s economic trajectory, potentially altering the landscape of public services and natural resource management for decades to come, with varying social and environmental implications.

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