Argentine provinces gambling on their revenues to resume public works

Argentina's provinces are trying to restart public works projects on their own, but the proposal to pass control of certain projects from federal government to provincial administrations is jeopardized by their financial situations. 

“If the provinces are taking national public works projects to finish them because they have the required funds it would be welcome. If not, it will be useless,” Gustavo Weiss, head of Argentine construction chamber Camarco, told BNamericas.

As part of his efforts to court the support of provincial governors, President Javier Milei added an article to his flagship omnibus bill that would transfer ongoing projects from federal agencies to provincial governments.

This article was part of the text approved by the senate last week, although there is yet to be a vote on the specific changes and it will have to be re-ratified by the lower house of congress. 

Provincial governors have been hammering out agreements with the federal administration in recent weeks over the projects that would change hands under the proposed scheme. 

“You would have to talk to each province, see which projects they're taking on and what funds they have to address the works. That’s the issue,” Weiss stated.

BNamericas previously highlighted some of the projects that are could be transferred to the provincial administrations. 

However, the provinces' finances have been hit hard by Milei’s austerity crackdown.

Federal transferences to provinces fell by an average 19% year-on-year in the first four months of the year, according to a report from Buenos Aires-based economic policy think tank CEPA.

In the case of infrastructure, figures from national statistics bureau Indec and financial information system e-SIDIF show that funding for some infrastructure-related programs either dropped dramatically or was halted altogether. 

At the same time, provinces’ own revenues dipped 13% year-on-year in the same period, due to the recession still affecting the country and its impact on local tax collection, the CEPA report adds.