Correo Argentino SA on track private ownership

The Argentine government-run postal service formerly known as Correo Argentino SA is on track to return to private ownership in May, keeping with the original decree that had revoked the concession in November, the government-appointed postal administrator said. Eduardo Di Cola, a former congressional deputy now running the postal service, said the state is still planning to reprivatize Correo Oficial Argentino – as it is currently known – within the 180-day deadline set when the government revoked private company Correo Argentino SA’s concession in November 2003. Di Cola also said he believes a mixed system – in which the state retains a partial stake – would be best. He made his comments after a public presentation at the Argentine Congress on the state of the postal service. “I would recommend a mixed participation,” Di Cola told reporters. However, he qualified that statement by cautioning that having certain public services “in the hands of the state traditionally is complicated.” President Nestor Kirchner’s administration stripped Correo Argentino of its postal contract in November, citing missed payments and other failures to comply with the terms of the concession. The government decree called for a new tender by May. Di Cola dismissed the idea that recent embargoes against some New York-based accounts of Correo Argentino SA are complicating the government’s plans to find a new owner. In February, Macrotecnic International Corp, a U.S.-based creditor with a $540,000 judgment against Argentina, had briefly succeeded in getting a temporary embargo on New York-based accounts listed under Correo Argentino SA. Macrotecnic’s argument was that these accounts should be considered an asset of the Argentine state, since Correo Argentino is in debt to the government. One month later, the same New York federal judge dropped the temporary restraining order on the two accounts. The matter of the embargoes “is being managed by the bankruptcy judge,” Di Cola said. Correo Argentino SA was declared bankrupt in December, but that decision was suspended in January 2004. “That doesn’t at all affect the delivery of service or the process of a new concession. This is something the state has to define between the government and the ex-concessionaire.” The legal situation involving the embargoes – not to mention Correo Argentino’s pre-existing troubled financial state – had sparked speculation that the government would have trouble finding a new operator for the postal service in May. But Di Cola said his office is already working on the tender offers. “There are interested buyers,” he said. “There are national and international (buyers).” Di Cola declined to give more details on the prospective parties or the tender process. However, he said the future ownership structure “should avoid a monopoly.” Correo Argentino’s market share is about 38percent. “A monopoly would not be good,” the administrator said. “Let’s avoid all possibility of a market where one player dominates.” Di Cola’s comments suggest that he would prefer a buyer other than Correo Argentino’s main competitor, OCA, which also has a 38percent market share. OCA hasn’t made any public statements about whether it is interested in bidding for Correo Argentino’s former postal services. Meanwhile, Di Cola said his office and other officials are working on regulatory legislation for the postal system, though the project is still in early stages.