Argentina and Spanish railroad firm differ over contract cancellation

Spanish railroad car manufacturer Talgo this week refuted an Argentinean official’s claim that the government in Buenos Aires was forced to cancel a public contract with the company because its servicing costs were too high. In a statement, Talgo denied that it ever had any such contract with the government of President Cristina Fernández de Kirchner.

Instead, Talgo officials explained that they had held an agreement with private Argentinean metal company Emepa to maintain rail carriages it had purchased from Spanish company Renfe, but that contract was terminated two months ago.

“There was never any agreement between Talgo and the Argentinean government, or any of its public companies, only a small contract of an insignificant sum with Emepa,” read the statement released on Monday.

The discrepancies are the latest move in the ongoing battle between Argentina and Spain that began with the nationalization of Repsol’s YPF affiliate by Fernández de Kirchner. Last week, her interior and transportation minister, Florencio Randazzo, signed a resolution canceling a maintenance contract with Talgo for the servicing of a train route connecting Buenos Aires with Mar del Plata, saying that the Spanish firm’s costs of 42 million pesos was “excessive.”

But Talgo denied that such a contract existed.

Instead, it said, in 2010 Renfe signed an agreement with the Argentinean government for the purchase of materials to help design the high-speed rail link between the capital and the seaside resort. As part of that agreement, Renfe included six Talgo IV rail cars.

The Fernández de Kirchner government gave the maintenance contract to the private firm Emepa, which in turn subcontracted Talgo, according to the statement.

“No one can claim cancellation of any contract; there was only cancellation in service,” the statement said.

When the government in Buenos Aires announced it was nationalizing Repsol, it claimed that the Spanish oil giant was charging too much money for providing energy to consumers. Repsol officials, who have taken the Argentinean government to court and several world trade forums to demand fair compensation, claim that the Fernández de Kirchner government made its move after the discovery of a big oil find in La Vaca Muerta region.