Argentina’s construction chamber declares 'state of emergency'

Argentina’s construction chamber Camarco declared a nationwide “state of emergency” as the new government has clamped down on infrastructure spending and the sector continues to grapple with soaring inflation and payment delays.

“The danger of mass layoffs, of workforces being cut down to half or less, and the bankruptcy of an untold number of construction firms and their suppliers is imminent,” Camarco said in a release after an emergency meeting, adding that the sector can only hold on “for a few weeks.”

The association said that up to 200,000 jobs are at risk and that as many as 3,500 public work projects have been halted, while a source at Camarco told BNamericas some of the projects stopped advancing after President Javier Milei took office on December 10.

Contractors had previously complained of delays in payments, especially for projects that were being carried out by provincial governments but had federal financing. 

Federal tax transfers to provinces fell 9.5% during January compared to the same month 2023, the fourth consecutive month of decline, according to a report by Buenos Aires economic policy think tank CEPA.

Meanwhile, the cost of materials skyrocketed last year, with some provinces seeing annual construction inflation of over 200%.

Congress is currently debating Milei’s wide-reaching ‘omnibus bill’ which, among other things, would allow the government to renegotiate or rescind any contract “that creates obligations on the State’s behalf.”

Milei, however, has been forced to withdraw certain articles of the bill, including one that would have increased agricultural export duties which was opposed by legislators and provincial governors. 

The text was still being debated in the lower house of congress on Thursday, and it remains unclear if more articles will be dropped to secure its approval or if it will suffer additional modifications in the senate, as Milei does not have majorities in either chamber. 

The bill would also allow the privatization of a series of state firms including those that hold public work tenders such as Buenos Aires water utility AYSA and rail firm Trenes Argentinos.