The Argentine government has handed responsibility for the operation of the Paraná River network to the country’s general port administration agency (AGP), AgriCensus reported on 1 July.

Following a presidential decree, AGP would take control of the key waterway for a 12-month period, with potential for an extension, until a long-term international concession could be awarded next year, the report said.

Trade sources were warning that the new arrangement could damage the country’s grain export competitiveness, according to the report.

The presidential decree also stipulated that AGP would be in charge of collecting the toll paid by bulk carriers using the waterway and use those resources to pay for private dredging work, AgriCensus said. The toll is currently collected by the private concessionaire.

Belgian company Jan de Nul and Argentine company Emepa were still currently in charge of the concession despite their original contract expiring at the end of April, as the government had been forced to extend the concession for three months, the report said.

Head of the Rosario Grain Exchange (BCR) Daniel Nasini told local newspaper Infobae that it was vital to guarantee the continuity of the service in the short term, especially with the current low water levels in the Paraná.

“For this, it is essential that the works remain in the hands of specialised companies in the field, selected under a rigorous and transparent bidding process. The state has neither the experience nor the technical capacity to carry out these tasks,” Nasini reportedly said.

Meanwhile, industry bodies were warning that the government’s decision could result in higher production costs, AgriCensus reported on 2 July.

Luis Zubizaretta, head of Argentina’s soyabean chamber Acsoja, and also president of the country’s private port chamber, was quoted as saying in a statement that with the AGP in charge of collecting the tolls, it would make the overall system more expensive.

The national government was currently working on the technical and economic details of a new concession, which could have a length of 15 years, according to previous reports, AgriCensus wrote.

A key export route for agricultural commodities in Argentina, the Paraná has been the centre of a long running attempt by the government to renegotiate the terms of its operation after the existing agreement came to an end in April, according to the report.

The Paraná waterway comprises 86 ports and is a key route to export agricultural commodities such as soyabeans from Argentina and nearby Paraguay, but it has recently been affected by a number of challenges including severely low water levels which had disrupted transit through the river this year.