Processes, Information and Accounting Gaps in the Regulation of Argentina's Private Railways

Abstract

Almost a decade after Argentina began privatizing its railways, resolution of the conflicts between regulators, users and operators continues to take longer, and to be more difficult than expected. This paper shows that many of these conflicts arose because there are no rule of interactions between the key stakeholders. This is the result of inexperience in setting up concession agreements. Initial privatization were carried out in such a way that there was no time to refine contractual terms and many loopholes remained. Unforeseen events have happened and the regulatory agency has had to adapt its procedures and decisions to the limited information available as part of the renegotiations which have impacted all the contracts. The paper makes specific recommendations as to how to structure the renegotiations and as to how to develop a regulatory accounting system which will allow a fairer resolution of regulatory conflicts.

Keywords: railways privatization, contract renegotiation, regulatory accounting

JEL Classification: L5, L50, L51, L33, L92