Argentina government formalises control of Postal Services

The Argentine government has formalised its control of the postal service, publishing a resolution that also forsees future capitalisation of the company from the state. The legislation appears to be another indication that Correo Oficial de la Republica Argentina SA is moving closer to long-term state control rather than new private ownership. The government rescinded the contract of Correo Argentino, as the service was formerly known, in November and said it would be reprivatized within six months. However, that deadline passed without a new concession and the government turned Correo Oficial into a corporation in June, with Planning Minister Julio De Vido saying there was no real timeframe for granting a new concession. Friday’s resolution, issued from De Vido’s office, approves Correo Oficial’s constitution and statutes. The government also said the company’s capital will be increased once the state agency in charge has taken an inventory of all assets and submitted a budget to the Planning Ministry. The resolution gave no indication as to the size of the future capitalization, saying only that it would be “convenient to establish a minimum starting capital level, to increase it later.” In a Thursday speech, President Nestor Kirchner said “Argentina, like every country in the world, has to have its national postal service.” His remarks were taken as a sign that the government would prefer to retain control of the service rather than find a new private owner, despite repeated comments from Correo Oficial authorities that there are interested buyers. The postal service’s former owner, Correo Argentino SA, sued the government in June for the decree that formally transferred the postal assets into state hands. The private company said the measure was a violation of property rights. The key issue was an ARS760 million claim ($1=ARS3.0125) for compensation for improvements to the postal service’s Monte Grande sorting facility. It’s not clear whether the government is including Monte Grande in its calculation of Correo Oficial’s assets, since the private company says it invested above the annual requirement in the facility and should be compensated for that money. Argentina fully privatized the postal service in 1997, becoming the first country in the world to do so.