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Back To The Future: The Railroad Renationalized

(This article and its content were first published on thebubble.com, March 12, 2015).

http://www.thebubble.com/back-future-railroad-renationalized/

It was one of the more headline-grabbing moments of President Cristina Fernández de Kirchner’s melodramatic final address at the opening of Congress last March 1st: The maligned Argentine railway system has been renationalized and taken into public ownership again in its entirety.

It’s certainly a barnstorming way to champion public services for Cristina, no matter that the government-run State Railway Operator Society (OFSE) has in fact owned various lines across Argentina for a while now, more and more since the ruling Victory Front party (FpV) began swinging towards renationalization after the President’s second term began. In 2013, for example, the Sarmiento route in Greater Buenos Aires was added to the Roca and Bartolomé Mitre lines that were already under OFSE’s umbrella, in the wake of the tragic disaster at Once.

Constitucion Train Station, Buenos Aires. Image: dvortygirl via en.wikipedia.org and flickr.com

The Interior and Transport Ministry made sure to mention the Sarmiento line when it released the Resolution last week to renationalize following Cristina’s speech.

THE DECISION WAS “TAKING INTO ACCOUNT THE REMARKABLE QUALITY IMPROVEMENT EXPERIENCED IN THE SARMIENTO LINE AFTER THE STATE TOOK OVER THE SERVICE…”

Florencio Randazzo, the minister in question, later added:

“We have reasons to terminate the contract. The state is in shape to be more efficient than the private firms because it has proved so. We will not compensate anyone because it is not applicable.”

Buenos Aires province, and of course the city first of all, had remained the largely-privatized mother ship for trains in Argentina since the 90s until recent times. This ended in full this month. It’s estimated over 1 million people commute to work using the railroads here in the city every single day, and one trip on the Subte at rush hour is enough to make anyone appreciate how many people that means, and in how small a space. Thom Yorke’s words spring to mind, documenting our post-modern malaise: “packed like frozen food and battery hens”.

The government in fact owned the trains themselves in Buenos Aires too. But until this renationalization, it was the private contractors who ran the show. They set the ticket prices, paid the workers (often as little as they could) and were responsible for maintenance and updating outmoded models, the latter of which was a rarity. Cristina couldn’t help but point this out too, of course. Her government recently bought 200 brand-new train cars for the now state-run Roca Line, and the comparison with the aging models here in the city was too tempting to resist:

“THESE ARE BRAND NEW TRAIN CARS, EQUIPPED WITH UP-TO-DATE TECHNOLOGY, NOT LIKE THE ONES BOUGHT FOR BUENOS AIRES CITY CITIZENS…,” SHE SAID. “THEY REMIND ME OF THOSE TRAILERS SHOWN IN AMERICAN MOVIES. THEY MIGHT HAVE BEEN PRETTY…FIFTY YEARS AGO”.

This scantly veiled jibe at Mauricio Macri, the mayor of Buenos Aires who may yet succeed her come October, was an open goal. But she has a point. Macri, for his part as mayor, was reluctant to compel the train companies to do anything at all, uncomfortable with a too interventionist stance, though the occasional newer lines and trains on the Subte introduced during his time are certainly more pleasant- and much safer- than their stifling, rust-bucket counterparts that herald from the gloomier recent decades for the railways.

Ever since the wave of privatization that swept the railways in the 90s, the contractor businesses were reluctant to invest over what was strictly necessary to keep their lines going, as despite the obvious benefits to public well being and safety, this would not have been profitable. It was during the Carlos Menem governments (1989-1999) that this happened, and Argentina has been living under the shadow of it ever since. Back then, the dictatorship (whose war criminals Menem gave amnesty to) was still a recent, open wound, and, though it forever shamed a number of Argentine institutions such as the Armed Forces, perhaps a lingering distrust of State power was one of the most ingrained political tarnishes the Generals left behind.

Under Menem, state assets were sold off freely as the new order courted profit over unfashionable government control. The railroad was perhaps the prime example of this. Thousands of jobs were lost virtually overnight as the private firms were granted market freedom on the entire system by the President. This was not only encouraged by a Reganite World Bank- one of the big financial organizations the Latin American ecnomies would be in thrall to during the late 20th Century- but actively subsidized by it.

It’s remit as an organization for poverty eradication holds little sway on this continent. In fact, when the World Bank decided to loan the Menem administration huge sums to sack thousands of its State-paid railway workers, it actively stimulated poverty’s growth. The soaring unemployment during the 90s included many former railroad employees among its ranks. It ended up with over half the population below the poverty line by the 2001 financial crisis, two years after Menem left office.

The private/business approach to national railways meant not only repeated avoidance of investment into new models of trains, their maintenance and safety that was needed to keep up with the increasing urban masses (and keep them safe), but also a literal scaling back of the railway system itself.

The highwatermark of over 47,000km of track came during the late 40’s and the first Presidency of Juan Domingo Perón, the man responsible for nationalizing rail from the mainly British private owners (yes, that was very popular). Since then, the current total shrunk, fastest during the 90s, to now come in at present at around 34,000km. True, this neglect and decline of the network during the final decades of the century was to some extent a reaction to slumping services, a swelling glut of costs and the rise and rise of highways and the car.

Argentina, however, was also one part of the global vogue, particularly during the 90s after the fall of the Soviet bloc, where many governments instituted privatization in varying degrees for any public service that wasn’t in tip-top condition (and even many that were). The same happened to the British railways, for example; now widely considered to be a mistake still haunting the UK, as a quick glance at UK ticket prices will indicate (not for the faint-hearted).

Here in Argentina, the shrinking back of the railways in the run up to and eventual rule of private companies was no less damaging. With access to more remote areas made much harder, many migrated from the interior into the ever-expanding cities, and this concentrated wealth there at the cost of other provinces, creating a lingering geographical imbalance in the economy.

A pioneering project: The first train ever to arrive at San Carlos de Bariloche. Image: Danieldj via en.wikipedia.org

It was almost like pressing rewind on the original, miraculous growth of the railways that happened here at the turn of the century; a process which freed up the huge potential for economic and social expansion that the vast landmass of Argentina has always embodied. This remains one of the country’s most powerful assets, and the decline of the train since its heyday has done nothing to help the nation exploit this great potential resource. Argentina was one of the richest countries on the planet during the late 19th-early 20th Century decades, and the railroads were at the heart of this prosperity.

The country witnessed huge economic expansion exporting its grain and beef cash crops to Europe, then the powerhouse of the 19th-Century world. They were grown in ever increasing numbers in the vast expanses of the interior, which until the railroad had in many ways only been nominally connected to the bustling cities. Getting all this harvested produce to the ports like Buenos Aires and then on to Europe as quick as possible and in ever greater volumes was key to Argentine economic growth, and it was all thanks to the railroads. These snaking rivers of iron began to criss-cross the vast empty plains and canyons on the map of the interior, and unite the huge distant regions of the nation economically, as the fighting Presidents had done before them politically. They came to symbolize Argentina’s turn of the century Golden Age, and it was with massive popularity that Peron nationalized them in 1948.

Fast forward to the current generation of Peronists, and privatized rail has proved a harder habit to kick this time than we might have guessed under the Kirchner’s. Until Cristina’s latest term, they both toyed with going cold turkey for a while but for some strange reason always seemed to fall at the last hurdle. Perhaps it had something to do with their (former) go-to transport guy Jaime Ricardo, prosecuted in 2013 for hefty corruption allegations that not only included the disappearance of public money but also the accepting of effective bribes by Trenes de Buenos Aires; one of the big corporations that ran part of the railroad until last week. When private capital and profit penetrate public resources, they seem to have a hypnotic effect on their guardians too.

Now firmly in the *ahem* driving seat again, Cristina and Minister Randazzo may decide to reassess the scaled back state of affairs and consider expansion once more, as Néstor also did without following it through. More likely still, they could push ahead and arm more of the system with up to date carriages like the Roca line now has. If they do, many, many people would benefit, even if the government coffers might not (each brand new car costs around 1.5m dollars). It just so happens the new models introduced last week are complete with special safety technology that prevents adjoining cars from crashing into each other in the event of a general technical failure or sudden stop, as happened in the Once disaster. Just one more reason why investing in the railways has got to be worth it.

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