Public works seen as key to Milei’s strategy to win over congress

Argentina’s federal government is willing to resume funding for certain public work projects, in what is seen as a move to win provincial governors' backing for President Javier Milei’s two main legislative initiatives: a sweeping economic urgency decree (DNU) and his so-called omnibus bill.

A committee consisting of public works and finance ministers from northern provinces will meet with federal officials in the coming days to establish working priorities, such as which projects will resume, Salta governor Gustavo Sáenz said in a press conference following talks between northern governors and interior minister Guillermo Francos. 

The federal government has specified that only projects that are already well advanced with construction and which have multilateral financing will be feasible to continue, daily Ámbito reported citing sources from the executive branch.

Sources present at the meeting told paper Infobae that the federal government pledged to present a preliminary list of projects after Easter, and Francos stated at the time that Milei’s administration was willing to make a “fiscal effort” to continue works.

Projects such as penitentiaries, flood control works, road safety efforts and general security are seen as priorities by the federal administration.

BNamericas previously took a look at some of the projects affected by the government’s cutbacks in public spending.

It is estimated that over 3,500 public works projects have been halted since Milei took office in December with a promise of reducing the state’s presence in infrastructure construction to a minimum and leaving it mainly in the hands of the private sector, a move that has been heavily criticized by the embattled local construction sector.

The meeting between northern governors and Francos took place just as Milei is expecting to submit a new version of his wide-ranging omnibus bill to congress, following a setback earlier this year when the proposal was sent back to committees due to a lack of consensus on certain articles, practically rowing back its previous approval by lawmakers. 

Milei’s move to suppress a compensation fund used by provincial governors to subsidize public transport fares was seen as revenge against provincial governors for failing to provide support for the bill in congress. 

The new draft, which is expected to be submitted next month, is said to include key changes from the original version, including removing national hydrocarbons firm YPF and electric company Energía Argentina from a list of state-owned companies that would be subject to privatization.

Other tweaks are related to exports and the licensing capacities of the federal and provincial governments, according to a draft text published earlier this month.

Milei, who lacks majorities in both chambers of congress, is also trying to garner support for his DNU, which was rejected by the senate earlier this month, leaving its final fate in the hands of the lower house of congress. 

The DNU is aimed at deregulating swaths of the economy and certain parts of it had also been blocked by the courts.

As with the omnibus bill, the DNU is expected to face a decisive vote after Easter.