A consortium of dredging companies backed by KKR & Co complained to the White House of unfair conditions in bidding for a pivotal contract in Argentina, calling on the United States for “timely engagement.” The companies sent a letter that coincided with a visit by Santiago Caputo, a top adviser to Argentina’s President Javier Milei, to Washington last week to discuss the auction with US officials. Bidding for the contract, which the government expects to draw US$10 billion in investment, is also nearing its definitive
phase with a winner to be potentially declared by May or June. The group alleges that Argentina’s port authority has rushed the process in favour of its lone competitor, and that Milei is unaware of what the companies see as an uneven playing field, according to a copy of the May 11 letter seen by Bloomberg. “Timely engagement now could be important before the tender advances toward a final outcome,” according to the letter signed by KKR and the other three members of the consortium.
Referring to Milei, “our assumption is that he is not aware of the clear bias against US-backed investment that now appears to be emerging.” The letter is addressed to Michael Jensen, a special assistant to US President Donald Trump and senior director for Western Hemisphere affairs on the National Security Council, who met with Caputo. Jensen and Caputo discussed the auction in their meeting but Jensen raised no issues with the process, according to a person familiar with the meeting. Besides KKR, the consortium is
led by Belgian dredging firm Deme Group NV and includes US-based Great Lakes Dredge & Dock Corp, as well as investment firm Clear Street Group Inc. Formally, only Deme is listed on the bid for the waterway concession, which is being overseen by Argentina’s Director Ejecutivo de la Agencia Nacional de Puertos y Navegación (National Agency of Ports and Waterways). Iñaki Arreseygor, director of the agency, said Deme could have added its partners months ago before submitting its bid but didn’t do so. Argentine law,
as well as the rules of the tender all sides agreed on, don’t permit any more changes to offers at this point, Arreseygor said via text message. KKR and Deme declined to comment. A press official for Milei referred requests for comment to the waterways agency. A US official said the nation’s ambassador to Argentina, Peter Lamelas, is closely watching the tender and confident that the bidding process will be fair and transparent. The consortium including KKR was accepted into the US Commerce Department’s Advocacy
Center, a programme that provides official lobbying for companies seeking to procure contracts abroad, according to other people familiar with the matter. Beyond KKR’s backing, the group also secured letters from the Development Finance Corp and International Finance Corp that expressed a willingness to provide financing if the consortium wins the tender. Caputo, Milei’s adviser, also met in Washington with Brian Mast, a Florida congressman and chair of the House Committee on Foreign Affairs. Representatives for Mast and his committee didn’t respond to requests for
comment. Crucial contract At the centre of the geopolitical dispute is a crucial dredging contract for the Paraná River, Argentina’s economic lifeline, where most of its grains are exported to the world. Years of drought and botched auctions have let the river become too shallow, causing ships to run aground, carry less cargo and waste time. Dredging it deeper would boost business and economic growth for Milei. Deepening the Paraná shipping channel is a priority for Argentina’s crop-exports industry. While a global heavyweight, the sector
has in recent years seen itself fall far behind booming Brazil, South America’s top food provider. The river contract is part of a portfolio of concessions and privatisations Milei wants to unleash to cut government spending and rake in dollars from sales. Yet many of these projects have faced setbacks: Milei’s first attempt to tender the dredging contract was aborted a year ago after only one bid was submitted by Deme. The company said at the time that that iteration of the auction was skewed
to another Belgian dredging giant, Jan De Nul SV. On the Paraná concession, Milei set a condition seen as a nod to the Trump administration: no state-run firms may bid, which effectively excludes Chinese companies that had previously dredged in Argentina. Yet the US consortium says other rules, such as a price floor on bids, don’t line up with industry standards. Deme is again competing against Jan De Nul, which had the previous 25-year contract on the Paraná. Jan De Nul’s consortium includes Argentine firm
Servimagnus SA. Both Belgian firms have worked with Chinese companies in other regions, and Servimagnus partnered with China’s state-run CCCC Shanghai Dredging Co. on projects in Argentina before. Servimagnus says it has no current links or contracts to state-owned entities. For its part, Jan De Nul has pointed to more competitive bidding in Argentina, where it recently won a smaller dredging contract for the Port of Buenos Aires, noting its roughly US$5-million bid was far better than Deme’s US$6.7-million offer. On the Paraná bid, “the
public tender process is transparent, with mechanisms in place to challenge the process. To date, and to our knowledge, no participant has filed any of such objections,” Jan De Nul said in a statement. While Deme has objected to aspects of the process, its grievances weren’t formally considered because it refused to pay a US$10-million “impugnation” bond, a requirement established by Argentine authorities. If officials reject any company’s challenge, they still keep the bond. In the letter to the White House, KKR and its partners
said that the National Agency of Ports and Waterways disqualified eight of the nine projects Deme submitted to demonstrate its dredging experience, despite the company’s global track record. Its partner, Great Lakes, also dredges parts of the Mississippi River. Arreseygor, the agency head, says Deme didn’t submit fully completed documentation and acknowledged as much. Argentine authorities also took two weeks to review over 5,000 pages of documentation as part of Deme’s bid, which “raises serious concerns that the technical evaluation was outcome-driven rather than conducted
on a genuine level playing field,” according to the letter. “This concession represents a concrete opportunity to advance US business interests in Argentina,” the companies said. “Regrettably, if the current trajectory continues, the concession will send the opposite message that the old way of doing business in Argentina still prevails – and could deter US investment.” by Patrick Gillespie, Bloomberg
KKR, White House, bias, Argentina auction, Paraná River dredging, Deme, Javier Milei, Santiago Caputo, Michael Jensen, Michael Jensen, National Agency of Ports and Waterways, US$10 billion, bidding